Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

CLYDE PORT AUTHORITY BILL

LONDON LOCAL AUTHORITIES (NO. 2) BILL [Lords]

Orders for Second Reading read.

To be read a Second time on Thursday 1 March.

Oral Answers to Questions — EDUCATION AND SCIENCE

Teachers' Pay

Mr. Haynes: To ask the Secretary of State for Education and Science if he will make a statement on the progress towards setting up new collective bargaining arrangements for teachers.

The Secretary of State for Education and Science (Mr. John MacGregor): I held a series of constructive meetings with the teacher unions and employers towards the end of last year. I am considering carefully the points put to me, and will make a further statement as soon as I am in a position to do so.

Mr. Haynes: That is not good enough. I want a firm commitment from the Secretary of State on whether the settlement in 1991 for teachers will be reached only by negotiations between the teachers and the employers. I want to know today—not next week or later, but today.

Mr. MacGregor: I am sure that the hon. Gentleman makes his points very loudly and forcefully to the teaching unions. If he does, he will know that they are divided about the right way forward for the long-term pay machinery. That is one difficulty preventing us from reaching a conclusion on the matter. I assure the hon. Gentleman that I am aiming—I hope that agreement will be reached on this for next year—to replace the interim advisory committee by a long-term arrangement.

Mr. Pawsey: Does my right hon. Friend agree that we do not want son of Burnham, or Burnham mark II, or any of that nonsense? Does he agree that we want improvements in pay matched by improvements in professionalism in the teaching service? We need a well-motivated, well-trained teaching force which can impart a love of learning to the nation's children.

Mr. MacGregor: I agree with my hon. Friend on both points. On the first point, I think that Burnham now has very few friends. There seems to be general agreement that

we do not want to return to that system. Difficulties arise because there are divided views about what should replace it.
On the second point, I hope that my hon. Friend will agree that my immediate acceptance of the interim advisory committee's report on teachers' pay, with its far-reaching recommendations, will help to provide a better career structure for teachers. I agree with my hon. Friend about the importance of professionalism among teachers. It is extremely important, and I know that the vast majority of teachers set store by it.

Mr. Simon Hughes: What is the Secretary of State waiting for? Does he realise that the sooner he announces a date for meetings with the unions—given that there has been no meeting since November—the sooner the confidence of the profession will be restored? Many teachers are unhappy, as he well knows, with the 7·3 per cent. or, according to his figures, 8·3 per cent. increase. Teachers are not responding by coming back in shortage areas, and they will do so only when they know that they can put their case, the Secretary of State can put his, and there will be proper discussions and agreement about what they should be paid. What is he waiting for?

Mr. MacGregor: The first thing was to get the April 1990 settlement out of the way. We have still to do that, as the hon. Gentleman knows, because I am still consulting teacher unions and employers on the interim advisory committee's recommendations. I have accepted those excellent recommendations, and I hope that they will, too, because I believe that they will make considerable improvements to the structure and the overall position of teachers' pay. The next stage is to continue discussions on long-term machinery, and I hope before too long to be able to embark on the necessary round of meetings on that. But we must get the discussions on next year's settlement out of the way.

Music Teaching

Mr. Devlin: To ask the Secretary of State for Education and Science what steps he is taking to encourage the teaching of music in schools.

The Minister of State, Department of Education and Science (Mrs. Angela Rumbold): Music is a foundation subject in the national curriculum. This means that it will form part of the curriculum for every pupil aged five to 16 in maintained schools in England and Wales. We hope to make an announcement soon on the machinery to be set up to advise on the national curriculum requirements for music.

Mr. Devlin: Is my hon. Friend aware that in Cleveland substantial fees are now proposed for children taking part in musical activity out of school hours, if the school is not under direct local education authority control? The basis of the scheme is that the amount will be deducted from the budget of all county schools as part of the central funding arrangements under the local management of schools. The parents of children attending private schools, and other schools outside LEA control will have to pay a substantial sum each term, despite the fact that they already pay rates or community charge.

Mrs. Rumbold: I was not aware of it, but I deplore it. Traditionally, children attending independent and LEA


schools have been able to take part in extracurricular activities such as playing in local youth orchestras. Asking the parents of independent school pupils to pay exhibits vindictiveness on the part of the local authority, and I hope that community charge payers will take up the matter with their local finance directors.

Ms. Walley: Is the Minister aware that music has been designated an official shortage subject? Many schools have no music teacher in post, making it impossible to introduce the national curriculum.

Mrs. Rumbold: We are taking steps to ensure that there are enough music teachers when the national curriculum music requirement comes into full force. We are already looking to schools to deliver the music element of the national curriculum—as they are under an obligation to do—and we trust that when the official requirements come into force in two years' time, there will be enough music teachers to carry out the necessary duties.

Mr. Key: Will my hon. Friend reconsider the question of solo and group singing teaching? Despite her best endeavours, the continuing confusion about charges is very detrimental to music nationally.

Mrs. Rumbold: I shall certainly undertake to do that. When choral singing is part of the school curriculum there is no question of charging for lessons, but when individual tuition is given for purposes unconnected with examinations, schools may charge under the legislation.

Qualified Teachers

Mr. Jim Marshall: To ask the Secretary of State for Education and Science what steps he is taking to attract qualified teachers back into teaching and if he will make a statement.

Mr. MacGregor: From April 1990 I am making education support grant available to 45 local education authorities to support expenditure of £4 million over two years for recruitment of qualified teacher returners and mature new entrants to teaching. In addition, the work of the teaching as a career unit is to be expanded, and that unit's conferences and published advice to LEAs on returners will be provided in the spring.

Mr. Marshall: I thank the Secretary of State for that reply, despite the fact that I am an Opposition, not a Conservative Member. Does he consider, however, that the comparative failure to attract sufficient teachers back into the profession shows, first, the continuing pressure on teachers caused by the introduction of the national curriculum, and, secondly, the low morale that is endemic in the profession as a result of a continuing lack of resources and comparatively small salaries?

Mr. MacGregor: Considerable numbers of teachers are joining and returning to the profession each year. According to the provisional figures for 1987—the latest figures available to me—the number is approaching 30,000, of whom more than 16,000 are re-entrants. But I agree that this is an important matter. Not least because of the demographic downturn in the number of school leavers, there will clearly be competition from all employers. As a high proportion of qualified teachers—for

entirely respectable reasons—are not currently teaching, they will comprise a significant element of the profession in the 1990s.
I agree with the hon. Gentleman about the importance of ensuring that teachers overcome their fears of the national curriculum. That is one reason why I am making the money available it is intended to enable teachers who are not teaching at present to keep in touch with developments.

Mr. Dunn: Is my right hon. Friend aware that in the south-east national pay scales and national pay bargaining are a tremendous disincentive to the recruitment and retention of teachers? Does he agree that it is time to move towards a position where schools set the salary levels that they wish to offer, if they are to retain and attract teachers?

Mr. MacGregor: My hon. Friend will have noted the considerable increase in flexibility locally and in schools as a result of the interim advisory committee's recommendations this year, which the committee described as far-reaching. I greatly welcome that increased flexibility, which is one of the many merits of the report. It will go a considerable way towards achieving my hon. Friend's objective.

Ms. Armstrong: The Secretary of State will know that we lose more women from the work force for longer periods than do our European competitors. According to an Equal Opportunities Commission survey last year, the main reason is the lack of adequate quality child care. What will the Secretary of State do to ensure that there are sufficient nursery places so that women teachers can confidently return to the classroom?

Mr. MacGregor: The hon. Lady is right to focus on this important group of people. About 250,000 qualified teachers between the ages of 31 and 44, most of them women, are not teaching for perfectly respectable family reasons. It is important to attract them back into teaching. A range of measures is require: supportive and flexible working conditions, flexible pay, part-time work and job share opportunities, together with the child care provision that the hon. Lady described and the access to in-service training that I described. That is important and I am keen to encourage it. I had a meeting recently with the National Union of Teachers at which we discussed its good pamphlet on the subject. I agree with the vast majority of the pamphlet's contents

Village Schools

Mr. Bellingham: To ask the Secretary of State for Education and Science what recent representations he has received regarding small village schools.

The Parliamentary Under-Secretary of State for Education and Science (Mr. Alan Howarth): My right hon. Friend regularly receives representations about rural primary schools which are the subject of reorganisation proposals.

Mr. Bellingham: Is my hon. Friend aware that many of my constituents are pleased with his positive attitude towards small schools? Will he turn his attention to Syderstone primary school in my constituency which is being considered for closure by a Norfolk county council sub-committee, although we hope that it will change its


mind? Although only 19 children are on the school roll at the moment, there are 47 children of primary school age in the village. Evidently, there are special reasons for the fall in numbers. Does my hon. Friend agree that the way forward is for the school to be given a reprieve to enable it to build up its numbers?

Mr. Howarth: If proposals are published to close Syderstone primary school, the case could come to my right hon. Friend the Secretary of State for decision, so my hon. Friend will understand that it would not be appropriate for me to comment. I have, however, noted my hon. Friend's active concern about the school—as, I am sure, have his constituents. I assure him that any points that he puts to us on behalf of his constituents will be considered carefully.
On the more general issue, we recognise that small schools can provide excellent education. We also recognise that rural schools play an important part in the life of the local community. They are some of the factors that my right hon. Friend takes into account when he makes judgments on these cases.

Mr. Campbell-Savours: If all that is true, why do the Government insist on placing on counties such as Cumbria the responsibility to close rural schools by cutting their budgets? In the county where I live, people pay taxes for education and they want those schools to be retained. They cannot understand a Government who say, "Keep them", while also saying, "We intend to take your money away so that you will have to close them."

Mr. Howarth: Underoccupied schools carry high unit costs. That is a consideration which local education authorities should properly take into account. They should also take into account the quality of the education provided by the schools and the wishes and needs of the local community. It is for local education authorities to initiate proposals.

Miss Emma Nicholson: Does my hon. Friend accept that although I welcome his support for small primary schools in villages, the cut in planned expenditure from Government central funding for Devon will inevitably harm the capital expenditure proposals for Horrabridge county primary school, where the children have to cross two main roads from one set of temporary classrooms to another, which is wholly unacceptable?

Mr. Howarth: The annual capital guidelines that we issue to local education authorities on the capital expenditure that they may undertake on schools are based on well-understood criteria and priorities. If Devon's capital guideline does not in all respects match my hon. Friend's desires, that is because the bids put forward by her county did not closely match our priorities. It is entirely for the authority to make its own determination on whether to spend money on an individual county school.

Sport

Miss Hoey: To ask the Secretary of State for Education and Science whether he will make a statement about the provision of sport in schools.

Mrs. Rumbold: Sport in school is an important part of physical education, which is now a foundation subject in

the national curriculum. I welcome also the wide provision of sporting opportunities for young people outside the school day.

Miss Hoey: Is the Minister alarmed at the way in which sport in schools is being affected by the severe shortage of physical education teachers, which is as much as 22 per cent. in some areas? Does she agree that the Government have downgraded physical education by not yet setting up a formal working party to look into the physical education curriculum?

Mrs. Rumbold: It was only a short time ago that we had a considerable surplus of physical education teachers in Britain. I agree with the hon. Lady that at the earliest possible moment we should set up a working group to look into the provision of physical education in schools under the national curriculum. The issue raised by the hon. Lady will also be considered.

Sir John Stokes: Although the battle of Waterloo may not have been won on the playing fields of Eton, does my hon. Friend agree that sport plays an important part in encouraging leadership among young people? Will she have a word with the public schools and ask them to help the state sector in improving sporting facilities?

Mrs. Rumbold: I thank my hon. Friend for that question. I agree that physical education and sport are a very important part of school life. As it will be part of the national curriculum, where necessary we shall be able to improve the standard of sport in the maintained sector. I am glad that England is doing rather well in rugby union and cricket.

Mr. Fatchett: Although the Minister may take some immediate comfort from what is happening in Jamaica, will she confirm that in the vast majority of schools in Britain there are serious risks to the continued provision of school sport and physical education? Will she also confirm that the local management of schools, the privatisation of leisure facilities and the general squeeze on budgets caused by the poll tax put school sport even more at risk? Although there may be optimism today, in 10 years' time, unless there is a change in Government policy, fewer people will be playing sport at international level.

Mrs. Rumbold: I remind the hon. Gentleman that physical education is part of the national curriculum. It is highlighted precisely because of our concern about the decline in sporting facilities and physical education over the past 10 years and considerably beyond that, because of the attitude of some teachers towards competitive sports. We consider competitive sports to be an important part of education, but sadly teachers in charge of physical education did not always agree. I am convinced that the introduction of physical education as part of the national curriculum will dispel the nonsense about competitive sports and that youngsters will be encouraged to play sport as part of their total school curriculum.

Sir Anthony Grant: Is my hon. Friend aware that the half-baked attitude of some teachers who oppose any competitive sport is the greatest possible impediment, and that it is of considerable concern to Cambridgeshire county cricket association?

Mrs. Rumbold: My hon. Friend is right. The rubbish and nonsense that have been spoken about the dangers of


competitive sport for small children in particular have undermined the provision of physical education and sport in schools. Young children enjoy competitive sport. We should encourage that, not discourage it.

Student Loans

Mr. Kennedy: To ask the Secretary of State for Education and Science if he will make a statement on progress towards introducing top-up student loans.

The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Jackson): Having had an easy passage in this House, the Education (Student Loans) Bill is having its Second Reading in another place today. Rapid progress is being made on preparatory work. Subject to Parliament's approval, we are well on course for providing extra resources for students this autumn.

Mr. Kennedy: I congratulate the Minister on finding a fantasist to draft that reply. Given the utterly disastrous meeting on 19 February of the leaders of the main education institutions, who made clear their implacable hostility to the proposals, and the absurd fact that the Government Chief Whip in another place is today imposing a three-line whip and saying that this is an issue of confidence, will the Minister at least display even-handedness? He accepted, with some magnanimity, the decision of the high streets banks to withdraw. If the independent education institutions hold their line not to co-operate, will he adopt an even-handed attitude and not force them when he was unable to force the banks?

Mr. Jackson: The Government are considering whether they need the co-operation of the higher education institutions in providing this money for their students. When we have made up our minds, we shall decide whether to table an amendment to the Bill, as they have invited us to do.

Mr. Brazier: Does my hon. Friend agree that such loans are a feature of the education systems in America, Japan and many European countries, including several Socialist countries? Does he further agree that those who have the advantage of a university education should make some repayment to the state?

Mr. Jackson: A striking feature of the debate on student loans was that all the major contributors, including the vice-chancellors, to whom the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) referred, favour the principle of a graduate contribution. That is real progress. The only dissenting voice is the Opposition, but it appears that even they have dissenters on that point in their ranks in the other place.

Mr. Win Griffiths: Does the Minister have any idea how the student loans scheme will work? If he has, why did he not tell us during debates on the Bill? If he does not, why, after more than two years, has this not been solved?

Mr. Jackson: We have a very good idea how the student loans scheme will work. It will work very well.

Mr. Harry Greenway: Will my hon. Friend spare a thought for my student constituents, many of whose grants have not been paid by Labour-controlled Ealing council for last term, let alone this term? That council, like the Labour party, opposes student loans. Students are

forced to take out loans at high interest rates to pay for their board and lodging. Is not it time that the hypocrisy of the Labour party and Ealing council ended and that they looked after students properly?

Mr. Jackson: I commiserate with my hon. Friend's student constituents. I have been in correspondence with Ealing council about the matter. I agree with my hon. Friend that the availability of student loans will provide a resource for students which will make them more independent of the local authority grant system and of their parents.

Mr. Andrew Smith: Are not the procedures that the Secretary of State announced yesterday further confirmation of the vast and sinister big brother bureauracy that the Government are imposing to run the scheme? Specifically, can the Minister assure the House today that the Student Loans Company will not have access to individuals' tax records and that he will reimburse institutions for the additional administrative costs incurred with the loans scheme and with the access funds?

Mr. Jackson: The hon. Gentleman, uncharacteristically, goes over the top. There is nothing unusual about the arrangements that we are making for student loans. The loan is simply a form of customer credit and is common in other cases. There is no question of access to tax records. Indeed, that is one of our arguments against the proposal for a graduate tax which is favoured by the vice-chancellors. The hon. Gentleman must reflect on the fact that many people will have borrowed substantial sums from the taxpayer to finance their higher education and will have derived benefit from that. They will be under an obligation to repay that money to the taxpayer and it is perfectly reasonable that best commercial practice should be followed by the Student Loans Company in pursuing defaulters.

Undergraduate Course Applications

Mr. Andrew Mitchell: To ask the Secretary of State for Education and Science what assessment he has made of the trend in the number of applications for full-time undergraduate courses at universities and polytechnics since the Government announced their plans for introducing a student top-up loan scheme.

Mr. MacGregor: Applications for 1990 admission to full-time undergraduate courses received by the Universities Central Council on Admissions and the Polytechnics Central Admissions System by mid-December were at least 6 per cent. higher than comparable figures for the record 1989 entry. Full-time admissions to universities and to the polytechnics and colleges funding sector in 1989 are estimated to be 10 per cent. higher than in 1988.

Mr. Mitchell: In view of the widespread welcome that the Government's plans for expanding the higher sector of education have received and the fact that they must also be paid for, is it not perfectly fair, right and proper that students themselves should make some modest contribution to the expense of implementing those plans?

Mr. MacGregor: I entirely agree with my hon. Friend. It should also be borne in mind that many of the taxpayers who will be helping to fund students during their period at


university or polytechnic will, throughout their working lives, be earning a good deal less than the students will earn when they get into work. That is an additional reason why it is reasonable, as in so many other countries, to ask students to make a small contribution through the loans system. That has widespread support from parents and taxpayers throughout the country.

Mr. Harry Barnes: Applications for admission may be influenced by the student loan leaflet which the Department of Education published before the Report stage of the Education (Student Loans) Bill in this House. As the Bill is currently in the other place and amendments may be agreed to there, will the leaflet be pulped or is it assumed that the Bill will be forced through by a three-line Whip in this House?

Mr. MacGregor: The leaflet was produced in response to a considerable demand for information for potential students who might wish to go to universities or polytechnics next year. There was also a demand from Opposition Members for that information to be published. The leaflet makes it clear that the details contained therein are subject to the final outcome of the progress of the Bill in Parliament. Clearly, if there were changes, we should want to amend the leaflet. I hope that the hon. Gentleman agrees that it is right to provide that information for students who may be considering going to university or polytechnic in the autumn. Although there has been a good deal of publicity about the student loans scheme and few students can be unaware that it is likely to be in existence next year, the demand for places has increased, as it did last year when the scheme was in prospect. That is a clear sign that the loan scheme is not a hindrance to access to higher education.

Surplus School Accommodation

Mrs. Maureen Hicks: To ask the Secretary of State for Education and Science how many local authorities have surplus school accommodation.

Mr. Alan Howarth: Information about the number of surplus places in individual local education authorities is not held centrally.

Mrs. Hicks: Does my hon. Friend agree that the priority for resources going into education should be to educate pupils through books, equipment and teachers' salaries, and not to prop up empty desks and classrooms? Does he agree that it is a most awful waste of taxpayers' and community chargepayers' money if local authorities fail to exercise their responsibility to close those schools which have to be closed and to eliminate waste? In Wolverhampton alone, there are 11,000 surplus places and community chargepayers will be paying to keep them open.

Mr. Howarth: My hon. Friend is absolutely right to make those points. I very much hope that authorities in Wolverhampton and elsewhere will recognise that failure to grasp the nettle of surplus places means that children are consigned to inferior education in inadequate schools, that money is wasted rather than being spent positively on other valuable educational projects in the area, and that community charge payers are asked to bear a cost to no good purpose.

Mr. Alfred Morris: How many local education authorities have accommodation which, owing to lack of capital expenditure even for essential repairs, they cannot use? Is it not a shocking response to the crying need in Manchester that next year we shall receive barely one tenth of the amount needed even to repair old and poor school buildings in some of the most deprived parts of the city?

Mr. Howarth: I remind the right hon. Gentleman that under the last Labour Government capital spending on schools was cut by 50 per cent. after the International Monetary Fund took charge of our economy in 1976. Since then, capital expenditure per pupil in our schools has risen by 10 per cent. and my right hon. Friend the Secretary of State has secured an increase in the money available for capital expenditure from £352 million under the capital allocation system last year to £485 million under the capital guidelines system this year. We shall, of course, look as sympathetically as we can at the needs of Manchester. As I said in response to an earlier question, however, the guidelines that we have issued to individual authorities are based on well-understood and well-established criteria. If the bids from Manchester did not match those criteria this year, it was a matter of regret to us that we were not able to give more help. I hope very much that next year Manchester will make bids more closely related to the priorities that we have indicated. Then, of course, we shall look as sympathetically as we can at Manchester's needs.

Mr. Patrick Thompson: Regarding school accommodation, will my hon. Friend do all that he can to continue to support parental choice and the open entry policy provided for in the Education Reform Act 1988? Will he do all that he can to support good schools which have room for more pupils against local authorities which for bureaucratic reasons restrict entry to those schools?

Mr. Howarth: I agree very much with my hon. Friend. It is a matter of satisfaction that the system of more open enrolment will start to operate from next September and parents will have a greatly enhanced right to determine the schools to which their children go. That factor, combined with the pupil-based element of formula funding of local management of schools, will mean that parental choice is the principal determinant of the financial resources that go into schools.

Mr. Straw: As the learned judge pointed out last Friday when he declared unlawful the Secretary of State's decision in the case of Beechen Cliff school in Bath, the Government, by their policy of allowing schools to opt out, are wilfully sabotaging the ability of local education' authorities rationally to reorganise their schools provision in the light of surplus places. Will the Under-Secretary and the Secretary of State now abandon this most cynical and amoral abuse of power, by which local education authorities are encouraged—indeed, forced—by the Government to name schools for closure or reorganisation but as soon as local authorities name them the Secretary of State allows the schools to opt out?

Mr. Howarth: The Bath judgment is about the procedure used in determining this particular grant-maintained application in relation to other reorganisation proposals put forward by the authority. It does not affect the overall policy of making available to schools the option of grant-maintained status. The availability of the


grant-maintained option is certainly no bar to authorities' bringing forward sensible reorganisation schemes. Authorities have always been required to take proper account of the views of local people. Ballots on grant-maintained status are one way in which such views may be expressed. We have always made it clear that grant-maintained status cannot be a refuge for unviable schools. Indeed, my right hon. Friend the Secretary of State has turned down 11 applications.

National Curriculum

Mr. Stevens: To ask the Secretary of State for Education and Science what proposals he has to introduce flexibility into the curriculum for 14 to 16-year-olds.

Mrs. Rumbold: My right hon. Friend the Secretary of State has recently described the flexibility that will be available to schools in planning the curriculum for 14 to 16-year-olds. He has asked the National Curriculum Council and the School Examinations and Assessment Council to consider further a number of aspects.

Mr. Stevens: I am grateful to my hon. Friend for that reply. I accept that the disadvantages of specialising too early will be combated by the national curriculum, but does my hon. Friend agree that if pupils in these two educationally important years are to be given the best opportunity, provision should be made for options in addition to the national curriculum?

Mrs. Rumbold: Yes, indeed, my hon. Friend is absolutely right. That is exactly the course outlined by my right hon. Friend the Secretary of State in his speech to the Society of Education Officers—the availability of a different combination of subjects which it is open to young people to take at the same time as studying the national curriculum foundation and core subjects. My right hon. Friend made it clear that core subjects are expected to be followed and that national curriculum foundation subjects will also be followed, but that in some cases the foundation subjects may be combined with other subjects for study in those two crucial years.

Mr. Leighton: In seeking that flexibility, will the Minister bear in mind the situation in the London borough of Newham, where the standard spending assessment has been set for next year at £98½ million, whereas for expenditure even to stand still we need £105·7 million? That adds up to a cut of £7¼ million. If that axe fell on teachers alone, we should have only 411 teachers left. I know that most members of the Cabinet have their children educated privately, but what effect does the Minister think that these cuts will have in the deprived London borough of Newham?

Mrs. Rumbold: In the first place, the Government give grant to local authorities to underpin education expenditure. In the current year we expect there to be some £15 billion of expenditure—a 9·6 per cent. increase in the total amount of expenditure for education services. It is for the local authority to decide how to spend the Government support. As the hon. Gentleman knows, the national curriculum is an entitlement for all children in our schools, and I trust that all local authorities will bear that in mind in assessing their priorities.

Sir Ian Lloyd: Can my hon. Friend conceive of any curriculum flexibility which could possibly compensate for the ill-preparedness for life of those little dears on whose posteriors the High Court ruled yesterday not even a wooden spoon may fall without incurring the wrath of the judicial system?

Mrs. Rumbold: My hon. Friend expresses a point of view. There are ways, as there always have been ways, for teachers to maintain sensible discipline in class. It is imperative for children to have a disciplined environment in which to learn, and if teachers can exert discipline by other methods it is most important that they should do so.

Veterinary Education

Mr. Worthington: To ask the Secretary of State for Education and Science if he will make a statement on the Page report.

Mr. Madel: To ask the Secretary of State for Education and Science which university veterinary schools the Page inquiry into veterinary education visited during its inquiry; how many days were spent at each veterinary school taking evidence; and if he will make a statement.

Mr. MacGregor: I welcome the report of the committee chaired by Dr. Page on the demand for veterinary manpower, and the possible consequences for veterinary education. The committee took only oral and written evidence. The Government have already accepted the report's recommendations to remove limits on admissions to veterinary schools and to discontinue associated manpower reviews. The Universities Funding Council has now rejected the Riley report's recommendations affecting the Glasgow and Cambridge veterinary schools.

Mr. Worthington: It is good news that the Glasgow veterinary school has been saved, but will the Secretary of State condemn the recommendation in the Page report that takes all limits off the expansion of veterinary places and urges colleges wishing to do so to impose a levy on all students to finance expansion? If that proposal were accepted, the implications for higher education and for the principle of free access to higher education would be terrible. Will the Minister reject that recommendation?

Mr. MacGregor: I am glad that the hon. Gentleman at least welcomes the decision not to go ahead with the merging of the Glasgow and Edinburgh veterinary schools. I believe that that decision was absolutely right and I think that the decision to set up the Page inquiry—a decision taken by me—had a good deal to do with it.
On the hon. Gentleman's second point, it will, of course, be for individual institutions to decide whether to implement the recommendation to expand above the 400 limit, taking into account student demand, the Universities Funding Council's new mechanism for funding student places and their own circumstances.

Mr. Madel: After a thorough inquiry, the Riley committee said that the level of staffing in United Kingdom veterinary schools should increase, yet the Page committee said that there could be a 10 per cent. cut in the unit of resource without any noticeable effect on the quality of veterinary education. Does the Minister agree that the recommendation of the Page committee on the unit of resource is not acceptable?

Mr. MacGregor: The Page committee went into the matter with great thoroughness and realism. It is for the Universities Funding Council and the institutions to decide what to do. The Page committee was right in the view that it reached on the demand for veterinary graduates. It is for the institutions to respond to that point and the Page report was a useful insight into it.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Marland: To ask the Prime Minister if she will list her official engagements for Tuesday 27 February.

The Prime Minister: This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.

Mr. Marland: Is my right hon. Friend aware that it is not the principle of the community charge which causes concern, but the amounts that Liberal and Labour-controlled councils are asking people to pay? Is she further aware that Gloucestershire county council, which is controlled by the Liberals, has just set its community charge level and has seriously breached all Government guidelines on spending? Will she, without delay, set in motion a mechanism to charge-cap Gloucestershire?

The Prime Minister: I am aware of the position in Gloucestershire. As my hon. Friend says, it is a Liberal-Labour-controlled council. Conservatives are proposing lower community charges. My right hon. Friend the Secretary of State for the Environment has said that if councils persist in charging excessively high public expenditure he will not hesitate to charge-cap them. I cannot give any undertaking with regard to any particular council. My right hon. Friend must wait until all the charges have been set, then consider the matter and make up his own mind.

Mr. Kinnock: Is the Prime Minister aware that yesterday in the House her right hon. Friend the Secretary of State for Energy told hon. Members that household electricity prices will rise by between 8 and 9 per cent., and that two or three boards may increase their charges by a higher percentage? Can she tell us how that will help in the fight against inflation?

The Prime Minister: As the right hon. Gentleman is aware, those price increases come after a period during which the real price of electricity has fallen substantially. Indeed, the real reduction of 8 per cent. which domestic customers have enjoyed over the past five years must be taken into account. I really must take the right hon. Gentleman to task. Under the last Labour Government electricity went up by 2 per cent. every six weeks.

Mr. Kinnock: Cannot the Prime Minister get it through her head that it is the bills that people face now which really bother them and that she is blamed for most of those bills? If she cannot answer my first question, can she say how she thinks that the 13 per cent. increase in water charges, the 13 per cent. increase in rail fares and the 50 per cent. increase in mortgage interest rates will help in the fight against inflation?

The Prime Minister: When the hon. Gentleman raised these matters with me, I pointed out that for both water and electricity we required higher standards for environmental reasons. I said that if people required higher standards, it would mean higher expenditure. The right hon. Gentleman agreed then that higher standards would mean higher prices, so why does he disagree now?

Mr. Kinnock: As the Prime Minister is so interested in recent history, will she tell us why such huge increases are necessary after all the time that she has been in power, when plainly a great deterioration must have taken place?

The Prime Minister: In fact, the real price of electricity has gone down in recent years. Since privatisation, the real price of gas has gone down and since privatisation the real price of British Telecom services has gone down, so I am really rather proud—[Interruption.]

Mr. Speaker: Order.

The Prime Minister: Is the right hon. Gentleman now saying that he intends to drop all efforts at increasing—[Interruption.]

Mr. Speaker: Order.

The Prime Minister: Is the right hon. Gentleman saying that he is going to drop all support for and all policy on environmental improvement, because that is what his question implies?

Sir Marcus Fox: Does my right hon. Friend agree that despite the embarrassment to the Leader of the Opposition the House should welcome the triumph of democracy in Nicaragua?

The Prime Minister: Yes, once again the right hon. Member for Islwyn (Mr. Kinnock) was on the wrong side. I congratulate Mrs. Chamorro on becoming President of Nicaragua. It was a splendidly fought campaign. The people turned out the Ortega Socialist Government and I wish Mrs. Chamorro well.

Ms. Armstrong: To ask the Prime Minister if she will list her official engagements for Tuesday 27 February.

The Prime Minister: I refer the hon. Lady to the reply that I gave some moments ago.

Ms. Armstrong: Will the Prime Minister confirm that if local education authorities spend to the limit that she has set for the poll tax they will have to lose tens of thousands of teaching posts, and that the education of the nation's children will suffer? Is she happy to contemplate that prospect, or is she asking them to follow her example and that of many of her hon. Friends and to abandon state education and say that they are not bothered about it?

The Prime Minister: No, the hon. Lady is assuming that the more money that is spent on education, the better the education is. I am afraid that that is not the case. The highest spending authority in this country is ILEA, which has the worst education.

Mr. Tredinnick: To ask the Prime Minister if she will list her official engagements for Tuesday 27 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Tredinnick: Is my right hon. Friend aware that President Menem of Argentina has said that he has nothing but the highest respect for her and her Government and also that the state's finances can be saved only through rapid privatisation? Does she agree that that offers great opportunities for British companies?

The Prime Minister: I am sure that those are the right policies, but whether they can be put into effect in Argentina is another matter. There are great problems there at the moment. As my hon. Friend knows, we have just restored diplomatic relations with Argentina. I hope and believe that trade relations should now be stepped up and that the people who had interests there before will continue them. However, that will necessitate the Argentines bringing down their enormous rate of inflation because it will be impossible to invest until that comes down.

Mr. Hinchliffe: To ask the Prime Minister if she will list her official engagements for Tuesday 27 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Hinchliffe: Can the Prime Minister honestly defend the expenditure of £100 million this financial year on allowing hospitals to opt out while health authorities across the country face huge deficits, cuts and closures? Is she aware that the treasurer of Wakefield district health authority, Mr. Ray Corner, has just been sacked because he refused to allow the use of public money for wining and dining those involved in the opting-out process at a time when there are dangerously low nurse staffing levels in Wakefield district health authority? Will the right hon. Lady set up an inquiry into the matter?

The Prime Minister: On the first part of the hon. Gentleman's question, self-governing hospitals are not opting out of the Health Service in any way. They are part of the Health Service, but much more in charge of how to run themselves and take their own decisions. If they choose to work harder and take more patients, they receive increased income. No hospital can become self-governing until the Bill currently before the House has gone through, so at present there is no such thing.

Mr. Batiste: To ask the Prime Minister if she will list her official engagements for Tuesday 27 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Batiste: While German unification must necessarily be primarily a matter for the German people, will my right hon. Friend confirm that the natural and legitimate concerns of many other countries would be best allayed if the German Government took an early opportunity to confirm their acceptance of Germany's post-war boundaries?

The Prime Minister: I agree with my hon. Friend. When the Polish Prime Minister came on an official visit to this country he was most concerned about Poland's boundaries and that they should be guaranteed by treaty. He felt that the Helsinki accord and assurances were not sufficient, and that Poland was entitled to have its boundaries guaranteed by treaty. We fully support him,

and I hope that that will come about. In the meantime, it would be very good to receive an assurance that it will come about.

Mr. Ashdown: Having last week blamed Conservative councils—[Interruption.]

Mr. Speaker: Order.

Mr. Ashdown: Having last week blamed—[Interruption.]

Mr. Speaker: Order.

Mr. Ashdown: Having last week blamed Conservative councils for the poll tax, will the Prime Minister this week condemn Conservative peers who have described her student loan scheme as "crazy"? Why does she believe that the best way to encourage young people into higher education is first to saddle them with the burden of a loan?

The Prime Minister: The Education (Student Loans) Bill has passed through this House and gone to the other place. The right hon. Gentleman is, or should be, aware that all educational tuition is free. The grant goes only for maintenance and there is also a topping-up loan for maintenance. All education remains free. For many young people who are unable to get a parental contribution to their grant, even though they would be entitled to one, it will be helpful to get the best value loan on offer anywhere in the country.

Mr. Wilshire: To ask the Prime Minister if she will list her official engagements for Tuesday 27 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Wilshire: Will my right hon. Friend confirm that since 1948 doctors have had the right to refuse patients admission to their lists? Does she agree that it is totally wrong for a few general practitioners to use the excuse of a new contract to refuse patients admission to their lists? Will she join me in condemning the cruel and misleading campaign being run by a daily newspaper which seems to be aimed at frightening patients into opposing the new contract? Will she also join me in calling on the Labour party to disown that campaign?

The Prime Minister: Yes, I join my hon. Friend in doing that. First, there are now more doctors as general practitioners in the Health Service than there were some years ago, so their lists are considerably smaller than they used to be. Secondly, the new contract deliberately provides a bigger capitation fee for vulnerable patients and nearly doubles the amount for each patient aged 75 or over. Thirdly, it doubles the payments for night visits which the general practitioner undertakes. Therefore, it is a very good contract, which I hope that most general practitioners will welcome. I know that some GPs are putting people off their lists. As my hon. Friend says, that is something that they have been able to do since 1948. I was pleased that the British Medical Association has said that it regards such action by general practitioners as unacceptable.

Mr. Lofthouse: What advice would the Prime Minister give to education authorities such as mine in Wakefield where abiding by the standard spending assessment will


mean a reduction in education spending of 22 per cent., equivalent to the cost of 1,450 teachers? Who is to teach our children?

The Prime Minister: The maximum amount spent on education does not mean the very best education. We learned that many years ago. The standard—[Interruption.]

Mr. Speaker: Order. The Prime Minister must have a chance to give her answer.

The Prime Minister: The standard spending assessment gives a reasonable amount to be spent on education. It will provide extremely good education for our children, provided that it is managed and run well by the local education authorities.

Mr. Quentin Davies: To ask the Prime Minister if she will list her official engagements for Tuesday 27 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Davies: Does my right hon. Friend agree that despite the positive reforms introduced during her Administration, recent events have made it clear that the British trade union movement has a long way to go before it can be considered either democratically accountable to its members or free of manipulation by political extremists?

The Prime Minister: I agree with my hon. Friend that there is still quite a long way to go. A new trade union Bill is coming before the House which will give every union member the right to complain to the certification officer or to the court if he believes that a union has acted unlawfully. We shall continue our reform of the trade union movement. We believe it has been very beneficial to the ordinary members of trade unions.

Flooding (North Wales)

Sir Anthony Meyer: rose——

Hon. Members: Hear, hear.

Mr. Speaker: Order. Will hon. Members not remaining for the private notice question please leave quietly?

Sir Anthony Meyer: (by private notice): To ask the Secretary of State for Wales whether he will make a statement about the flooding in north Wales.

The Secretary of State for Wales (Mr. Peter Walker): A combination of high tides, severe weather and gales gusting at times to 100 mph has led to flooding and damage on the north Wales coast.
Parts of the Rhyl and Prestatyn areas have been flooded due to the over-topping of the sea defences, and the new Nova centre at Prestatyn has suffered extensive damage. At Ffynnongroyw near Prestatyn, 50 people have been evacuated from their homes. The railway line has been flooded.
At Towyn, the sea wall has been breached and 900 people have been evacuated from their homes. There has been extensive flooding of properties.
At Dinas Dinlle near Caernarfon, 15 people have been evacuated from their homes following an over-topping of the sea walls.
There was a further high tide at 12.15 today, and a forecast of further gale force winds and a storm surge. The reports that I have so far received indicate that there has been further extensive flooding in the same areas.
The emergency services and the local authorities are dealing with the immediate problems. I am sure that all hon. Members will join me in paying tribute to the dedication and hard work of all those involved in safeguarding life and property. My hon. Friend the Minister of State has immediately flown to north Wales and is visiting the areas worst affected.
The Bellwin rules will, of course, apply if the criteria are met.

Sir Anthony Meyer: I am grateful to my right hon. Friend for that statement and for the prompt and energetic action that he has characteristically taken. Is he aware that what has happened in my constituency and in adjoining constituencies is a disaster of major magnitude, that a great burden is falling on the local rescue services, which have responded magnificently, and that heavy charges will now fall on the local authorities in the provision of temporary accommodation for those who must be moved out—not, it seems, for a day or two but perhaps for several days—and in the clearing up and repair work that remains to be done? Is he satisfied that the Bellwin formula will adequately safeguard the position of the local authorities, bearing in mind the present pressures on local government finance?

Mr. Walker: I am grateful to my hon. Friend. A few moments ago I had a telephone call from my hon. Friend the Minister of State confirming the considerable problems and damage in my hon. Friend's constituency. The Bellwin rules apply if district councils are involved in expenditure of more than—for example, in Delyn—£27,000. My hon. Friend will know that that is virtually certain in the district councils with which he is involved, so there will be

substantial grants from the Government. I shall examine carefully any capital expenditure that may be necessary to see whether further quotas will be required.

Mr. Dafydd Wigley: I join the hon. Member for Clwyd, North-West (Sir A. Meyer) in thanking the emergency services for the tremendous work that they have done in Clwyd and in my county of Gwynedd. Will the Secretary of State give an assurance that local authorities will receive financial assistance to meet any revenue shortfall that may arise as a result of the work that has to be done, and that finance will be made available to the emergency services, such as the ambulance service, which may have suffered? Will the right hon. Gentleman also give an assurance that the sea defence walls along the coast will be reviewed in detail and, if a massive capital expenditure programme is necessary to safeguard the communities, that will be undertaken?

Mr. Walker: On the latter point, the hon. Gentleman knows that there has been large capital expenditure over the years in that area, but if further action is recommended, I shall examine it positively. We shall review the impact of the disaster and see what decisions need to be taken, but the most likely action will be on some capital expenditure programmes and in those areas covered by the Bellwin rules, and we shall ensure that instant decisions are taken.

Mr. Keith Raffan: I, too, pay tribute to all the emergency services and to the local authorities which have acted so promptly. As my right hon. Friend rightly says, the flooding today was worse than yesterday. In the village of Ffynnongroyw it was between 18 in and 2 ft. However, during the rest of the week, we are faced with consistently high tides and, depending on wind and surge, we could have more serious flooding.
I am grateful to my right hon. Friend for his assurance that the Bellwin rules are likely to be applied. Every assistance must be given to the local authorities involved, but will he also get in touch this afternoon with British Rail to ensure that all that can be done will be done to close temporarily the sea wall at Ffynnongroyw? However, in the longer term we obviously need a much more substantial sea wall, as the hon. Member for Caernarfon (Mr. Wigley) said, and British Rail may well need capital help.
As my right hon. Friend well knows, the coastal protection works at Prestatyn have gone through a major reconstruction in recent years at a cost of nearly £6 million, and local people need reassurance that those works, particularly those that have been newly constructed, remain effective. I know that my right hon. Friend will act promptly, particularly as so many houses in that area have been flooded.
Finally, the Nova complex, which is the main tourist attraction in the town, and on which the local economy depends, has been devastated. Will my right hon. Friend do all that he can to help reconstruction there, and, if possible, when he visits my constituency next Tuesday, will he visit Ffynnongroyw and Prestatyn?

Mr. Walker: I know how concerned my hon. Friend is, and that he has left hospital in order to be here this afternoon. We appreciate the considerable anxiety that he has displayed towards his constituents' problems. We shall carefully examine the lessons to be learnt from the sea wall.
As my hon. Friend says, I shall be visiting his part of north Wales next week, and I shall endeavour to find time to examine some of the problems and to speak to the local authorities involved.

Dr. John Marek: Will the Secretary of State assure the House that the Bellwin rules will apply to any requests from Clwyd county council with regard to the anthrax outbreak in the earlier part of this financial year and the present flooding? Secondly, has the right hon. Gentleman made representations to the Secretary of State for Social Security to ensure that crisis payments will not be held back by any vagaries of the social fund?

Mr. Walker: The Bellwin rules, which were agreed with local government, will operate according to the rules of local government. There will not be a combining of every incident that takes place. I think that the hon. Gentleman realises that local authorities rightly have contingency funds which they expect to cover some incidents of this description.

Several Hon. Members: rose——

Mr. Speaker: Mr. Harris—on Wales.

Mr. David Harris: Representing as I do, an area which has been grievously and repeatedly hit by this winter's storms, may I extend my sympathy to the people of north Wales on the disaster that they have suffered? Will my right hon. Friend kindly have a word with the Minister of Agriculture and the Secretary of State for the Environment to try to arrange a comprehensive examination of our sea defences? I assure him that much money will have to be spent on many parts of the coastline, particularly in Cornwall, to try to improve the defences against the sea and storm such as we have experienced repeatedly during this winter.

Mr. Walker: I will certainly convey to my right hon. Friends the views which my hon. Friend has expressed.

Dr. Kim Howells: Does the Secretary of State agree that the whole of Wales has been hard hit this year by flooding and other national disasters? Does he accept that it is not enough to refer to local authority contingency funds and that it will take positive action by him, including knocking together the heads of those authorities which need it, to ensure that remedial work is undertaken so that flooding does not affect people in Wales in future?

Mr. Walker: Yes, I can assure the hon. Gentleman that we will carefully examine the various problems in different parts of Wales that have occurred as a result of flooding, and that we shall examine and discuss with local authorities what action needs to be taken.

Mr. Nicholas Bennett: My right hon. Friend will be aware that it is only a few weeks since I asked a similar private notice question, about flooding in my constituency; that question was answered by the Under-Secretary of State for the Environment. Since then, I have been in correspondence with the National Rivers Authority and the district councils. There seems to be confusion and doubt about whose responsibility it is in the long term to deal with the flooding. Can my right hon. Friend assure us that there will be meetings between the National Rivers Authority and district councils, and that

an attempt will be made to see whether European money can be made available for the important job of constructing new sea wall defences?

Mr. Walker: I will certainly examine my hon. Friend's suggestion. As a result of the events that have taken place this year, we will have discussions with local authorities, the river authorities and all concerned to see that positive action is taken.

Mr. Eric S. Heifer: Is the right hon. Gentleman aware that those of us who come from Merseyside are deeply concerned about the problems of Clwyd because not only do many of our people go to live there but it is also a great lung for us? We love going to that part of north Wales, because the small towns and the seaside towns give us an opportunity at weekends to get some decent air into our lungs. I hope that the Government will give every possible support to the people in north Wales because, by doing so, they will also be supporting built-up areas like Merseyside.

Mr. Walker: I very much appreciate the hon. Gentleman's remarks. As he rightly says, Merseyside has a close association with north Wales, and always has had. I know that the people of Merseyside are anxious about what has taken place in north Wales, and I welcome the hon. Gentleman's remarks about it.

Mr. Robin Maxwell-Hyslop: Is my right hon. Friend satisfied with the aspect of the Bellwin rules that has to do with not covering buildings which could have been covered by insurance? May it not be much more prudent for a council to cover damage to buildings out of its contingency fund rather than pay insurance premiums which, in the long run, are designed to make a profit for insurance companies?

Mr. Walker: In fairness to my hon. Friend, there is available to local authorities insurance by an insurance company which has a mutual arrangement with local authorities and is non-profit making. Therefore, to some extent, if local authorities, find the premiums competitive, they have the opportunity to go to a mutual insurance company.

Mr. Charles Kennedy: In a simple spirit of Celtic comradeship, may I congratulate the Secretary of State for Wales on the efforts that he is clearly making? I contrast that with the actions of the Scottish Office and the Secretary of State for Scotland. I wonder if the right hon. Gentleman will have a word in his right hon. and learned Friend's ear. I have raised this matter with the Leader of the House on business questions on the past two Thursdays, because we have now had private notice questions answered by the Department of the Environment in the case of flooding in England, and by the Welsh Office for flooding in Wales. However, more than a month after severe disruption and distress was caused by flooding in various parts of Scotland, we have yet to hear anything orally from the Scottish Office. What is it that the Secretary of State has got that our man lacks?

Mr. Walker: I can only say that I have every admiration for the action that my right hon. and learned Friend takes, and I regard the hon. Gentleman's question as based not on Celtic affection, but on party advantage.

Mr. Ian Bruce: rose——

Mr. Speaker:: Mr. Bruce. Is this still about Wales?

Mr. Bruce: Yes, Mr. Speaker.
Will my right hon. Friend accept that I echo everything that my hon. Friend the Member for St. Ives (Mr. Harris) has said? The sea defences throughout Wales, England and Scotland are in poor repair. I particularly emphasise that enormous grants are available from the Welsh Office, the Department of the Environment, the Ministry of Agriculture, Fisheries and Food, the Department of Transport, county councils and district councils. However, often when people face problems they do not know who is supposed to deal with the matter, or where to get the grant.
I ask my right hon. Friend whether he could urgently discuss with his Cabinet colleagues having a single agency, with a single grant, to undertake this type of work, so that all the confusion is washed away, rather than our constituents being washed away. Certainly the people of Weymouth and Swanage have found in the past few weeks, exactly as the people of north Wales have, that this is not a pleasant experience, and we need to get it sorted out.

Mr. Walker: I think that the Welsh experience is different, because there is one Welsh Office to assess the whole range of functions required. I shall certainly convey to my right hon. Friends my hon. Friend's remarks about the position in England, and about the combination of grants available.

Mr. Barry Jones: May I offer 100 per cent. support to the hon. Member for Clwyd, North-West (Sir A. Meyer), who always guards his constituency in an exemplary fashion? May I also welcome back the hon. Member for Delyn (Mr. Raffan) from hospital? We all appreciate the praise that the right hon. Gentleman has given to the emergency services. He knows that they have been absolutely magnificent.
Does the Secretary of State agree that, with a 200 m breach in the sea wall, with the sewage pumps out of action, with more than 400 m of inland flooding, with a 10 m tide at a quarter past noon today, and with more than 900 people officially evacuated—and I am informed that the water level is still rising—this is a definition of a major disaster, as the hon. Member for Clwyd, North-West stated in his original question? Financial aid on a large scale, and a specific commitment this afternoon, are now required.
The Secretary of State should carefully consider the lack of a rail link between Holyhead and Chester. I should like him to tell the House his estimate of when the rail link will be restored, because the island of Anglesey's economy almost totally depends on that link. I am informed that it may be many weeks, and I should like to hear the right hon. Gentleman say that he has considered urgent action to restore the link, and has even considered asking the Army to help.
Will the right hon. Gentleman acknowledge that we are looking for a specific commitment of new money in major quantities today to enable north Wales to face up to a major disaster?

Mr. Walker: I am grateful to the hon. Gentleman for the tributes that he paid to my hon. Friends, and to the emergency services, with which I agree. He mentioned the railway. He will be well aware, as a former Minister in the

Welsh Office, that if further flooding has taken place at noon today, there is no way that I can at this point estimate the magnitude of the damage and what is required.
I totally agree with the hon. Gentleman that it is a necessity for the economy of Anglesey and other parts of north Wales, for the damage to the railway system to be tackled as speedily as possible. Obviously there will be talks with British Rail and any assistance that we can give, we will give enthusiastically.
As far as the general scene is concerned, which the hon. Gentleman describes as a major emergency, certainly, from all the information that I have and from a recent phone call to the Minister of State, I agree with that assessment. I have no doubt that substantial grants will be available from the Government to virtually all the district councils concerned, because sums will exceed certain limits.
I am very pleased that agreement was reached with the local authorities, and that, in the event of such emergencies, they will now know that the Government will respond speedily. In the past—including the period during which I was Secretary of State for the Environment—Governments of all persuasions engaged in lengthy assessments and deliberations about exactly what was necessary and how the matter should be dealt with. Now help will be automatic, and I assure the hon. Gentleman that the Welsh Office, recognising the importance of north Wales, will play its part in ensuring that speedy remedial action is taken.

Hospitals (Expenditure)

Mr. Nigel Spearing: On a point of order, Mr. Speaker. I apologise for not giving you notice of this point of order, but I believe that there is a rule that, unless such matters are raised at the first available opportunity, it may not be possible to raise them at all.
It is, I think, a well-known principle that no moneys can be expended by Her Majesty's Government other than those that lie within their power by Act of Parliament or a Vote in the House of Commons. You will remember, Mr. Speaker, that my hon. Friend the Member for Wakefield (Mr. Hinchliffe), during questions to the Prime Minister, referred to expenditure of £100 million in relation to opt-out hospitals. In replying, the Prime Minister did not dissent from my hon. Friend's proposition; indeed, she mentioned that the hospitals would not become self-governing until the necessary Act had been given Royal Assent.
Can you, Mr. Speaker, give me some guidance—either now or at a later date—on the prima facie case that some money, although perhaps not £100 million, has been spent for that purpose before Royal Assent had been given to a Bill that is still being considered by the House?

Mr. Speaker: The hon. Gentleman knows that I am not responsible for answers that are given by Ministers, and it is not for me to look into such matters. If an incorrect statement has been made, however, I am sure that there are other ways of putting things right.

Relief of Planning Blight

Mr. Malcolm Moss: I beg to move,
That leave he given to bring in a Bill to minimise the effects of planning blight by establishing a maximum period of time within which compulsory purchase of land and property by local authorities and other statutory undertakers must be effected.
One minute a person may be minding his own business and caring lovingly for his garden; the next minute, crash!—the JCB turns up and starts to take away the hedge to make way for a new motorway. That is the ultimate home-owner's nightmare: it: might be called the Arthur Dent syndrome.
This may seem far-fetched, but some people find that such events have a terrible habit of creeping up on them, unexpected and unannounced. Others are caught in a trap, not knowing whether to fight the road proposals through the courts, sell their property immediately at a loss or wait until the scheme is completed before claiming the maximum compensation. In every case, however, the home owner seems to be on a loser.
Compulsory purchase, blight and compensation are now among the critical issues of our expanding and developing economy. Economic growth has meant that we have more vehicles and more road and rail congestion, especially in densely populated areas such as the south-east. There is a growing conflict between Government aspirations to improve road and rail infrastructure, and the deep-rooted desire of property owners who are in the way of such developments to retain the status quo. At times, it seems that "not in my back yard" has been crystallised into "over my dead body": an example is the resistance to the demands of the Channel tunnel rail link and the south London inner orbital road.
Attempts have been made recently to take a fresh look at the problem. The Royal Institution of Chartered Surveyors published its blue book last March, and the Government's consultation document came out at about the same time. Both publications proposed helpful and constructive amendments to the law, but so far the Government have not found time to present the necessary legislation. My Bill is a modest attempt to chivvy them along towards vital reform—not merely to give property owners a fairer system to speed up their receipt of rightful compensation, but to facilitate the acquisition of the necessary land to complete our new roads. If we are to have any chance of completing our £15 billion 10-year new road investment programme, we really must accelerate the process of acquiring land.
There are five areas of unfairness in the present system. First, compensation can often only be claimed once a precise route has been chosen. However, years may elapse between the reports and studies and the final decision. Secondly, when a route has been chosen, owners have to show that the property would have to be compulsorily purchased in order to claim the compensation. They are then entitled to a home loss payment, but only if they have occupied the property for five years.
Thirdly, if they tried to sell but were offered only a reduced price, they could serve a blight notice. In that instance, they would forfeit the right to the home loss payment. Fourthly, owners who do not need to be bought out have to wait for 12 months before they can claim

compensation for injurious affection. No backdating or interest is payable. Finally, there seems to be no compensation under the law to cover the element Of compulsion that is involved and recognition that the claimant is an unwilling seller.
Some of these problems were brought home to me as a result of the Government's White Paper "New Roads by New Means". Two of the proposals affect my constituency: the dualling of the A47 between Peterborough and Norwich and the partial dualling of the A 10 north of Cambridge. As for the A47, under the Town and Country Planning and General Development Order 1988, the Department of Transport informed the local authorities. Development is now effectively banned in a corridor 67 m wide on each side of the existing roadway. That has effectively blighted all the properties along that corridor. I ought to declare an interest, as my property is one of those in the corridor.
The property owners have not been told anything. That is an oversight and it needs to be rectified. My Bill would make it mandatory for a local authority that receives such a notification to publish it and to advise all interested property owners within the defined corridors.
The question is far more serious for owners where the Department of Transport has not yet determined the line of route, although feasibility studies or reports on potential routes have been made public, thus allowing a cloud of blight to descend over large areas of high-density housing. A relevant example is the case of the London assessment studies, which will take several years to receive official sanction. Owners are not entitled to compensation and will not be in a position to serve blight notices within that period, which could be up to two years. Projected road corridors are up to about half a mile wide, and it is calculated that 20,000 homes may be affected. In order to mitigate such effects, my Bill would require firm decisions to be made on projected routes within a year of studies being published. That would put a time limit on uncertainty and, I hope, would deter ill-considered studies.
The principal way in which compensation can be assessed and paid out well in advance of statutory work starting is via the vehicle of blight notices. Their purpose is to compel authorities to purchase land in advance of their needs in order to mitigate hardship to property owners. That can be done under section 192 of the Town and Country Planning Act 1971. The owner has to satisfy stringent conditions and can serve a notice only once the statutory stages of a scheme have started. The owner also has to prove a genuine attempt, without success, to sell the property at a reasonable price on the open market. The latter requirement causes hardship and seems to be unnecessary. My Bill would remove the requirement to prove an unsuccessful attempt to sell.
The second provision is section 248 of the Highways Act 1980. It gives discretionary powers to the Department of Transport and other highway authorities. There are many complaints that the stringent rules are too harsh and too readily applied. In order to speed up the process and provide a fairer system for owners, my Bill would remove the requirements of previous intention to sell and proof of an unsuccessful attempt to sell. Owners are hardly willing sellers in those circumstances.
Two outstanding issues are those relating to payments for home loss and injurious affection. Home loss payments are available under sections 29 to 33 of the Land Compensation Act 1973, but at present they can be


claimed only by owners who have lived in their houses for five years or more. The payments are automatic for compulsory purchase, but they are not made when a blight notice has been served. The current payment is 10 times the rateable value. However, after the change next April from the domestic rating system to the community charge, that will no longer apply. The Government are therefore proposing a flat rate of between £1,200 and £1,500.
The levels of payment are frankly inadequate; I commend to the Government the recommendations of the Royal Institution of Chartered Surveyors for an additional allowance to compensate for the factors of compulsion and in recognition of the fact that the claimant is an unwilling seller.
My Bill makes home loss payment available to owners who have served an effective blight notice, as I see little difference between those owners and those on whom compulsory purchase has been served. Owners would qualify for home loss allowance after only one year's residence. Injurious affection which is covered under part I of the Land Compensation Act 1973 concerns those properties affected by the development but which are not needed for the construction. At present, the owner cannot claim until one year has elapsed after the works have been completed. The Government have so far turned down requests to alter or shorten the time scale. Under the old rating system, an owner could apply for a reduction in the rateable value, but after April 1990 that will not be possible.
The time scale in which owners can obtain financial redress seems unreasonable and limited in scope. My Bill recommends that an assessment of the level of compensation is made after six months, and 60 per cent. of that amount is paid up front. The full assessment would take place after two years, with the balance of compensation payable, incuding adjustments with interest backdated on the outstanding payment.
The issues on compulsory purchase and compensation are extremely complicated and need immediate review and amendment. The payment of speedier and more realistic compensation is not a charter for over-the-top payments to a few homebuyers. The system needs to be made fairer, and in doing that the Government's aims to improve the infrastructure will be achieved more efficaciously and with less opposition.

Question put and agreed to.

Bill ordered to be brought in by Mr. Malcolm Moss, Mr. Barry Field, Mr. William Cash, Mr. Robert G. Hughes, Mr. Bob Dunn and Mr. Roger Knapman.

RELIEF OF PLANNING BLIGHT

Mr. Malcolm Moss accordingly presented a Bill to minimise the effects of planning blight by establishing a maximum period of time within which compulsory purchase of land and property by local authorities and other statutory undertakers must be effected: And the same was read the First time; and ordered to be read a Second time upon Friday 9 March and to be printed. [Bill 84.]

Orders of the Day — Criminal Justice (International; Co-operation) Bill [Lords]

Order for Second Reading read.

The Secretary of State for the Home Department (Mr. David Waddington): I beg to move, That the Bill be now read a Second time.
I venture to think that this is one of those occasions when there will be little disagreement in the House about the importance of a Bill. The small number of hon. Members present demonstrates not the lack of importance of the measure, but the lack of political controversy surrounding it.
The House needs no reminding of the menace posed to society by drug trafficking and other types of international crime, and the international community has to work against those whose trade is the misery of others.
The Bill is composed of two distinct but closely related parts. Each deals with international co-operation and each will enable the United Kingdom to ratify an important international convention. Each will demonstrate our willingness to co-operate with other countries in fighting international crime and provide us with the means to give assistance to other countries and receive assistance from them.
Part I is concerned with the generality of international crime and co-operation between this country and others over obtaining evidence for use in criminal proceedings.
We have made much progress in recent years in international co-operation on criminal justice. The passage of last year's Extradition Act brought our extradition laws fully up-to-date. When we ratify the European convention on extradition in the next few months, it will become simpler to return fugitives from justice to convention countries so that they can face trial in the countries which they fled.
It is also now possible for us to seize the assets of those who have deposited their ill-gotten gains in this country, having committed crimes abroad, thereby enforcing other countries' confiscation orders as a result of agreements made with them. Thirteen such agreements have been concluded—11 on drugs and two on serious crime generally—and more are in the pipeline.
Power to confiscate assets and power to extradite are not enough in themselves—we must also ensure that the evidence needed to secure a conviction can be brought before the courts, either in this country or overseas. Our law has remained unsatisfactory.

Mr. Dennis Skinner: Will the Secretary of State explain our extradition arrangements with the United States, particularly in respect of the two people involved in the Peter Cameron-Webb scandal on the stock exchange more than five years ago? Peter Cameron-Webb and his mate got away with about £40 million. According to reports, neither of them—they are living in the lap of luxury in America—has even had his collar felt. We are now told that it is too late to extradite them to face justice


in Britain. Will the Bill do anything to ensure that those two people are brought to justice for one of the biggest financial scandals in this country?

Mr. Waddington: This is not an extradition Bill. Last year, we passed an important Bill to bring our extradition laws up to date. It dealt with the circumstances appertaining at that time and with those that may arise following its enactment.
Britain is one of only a few countries in the Council of Europe that have not ratified the European convention on mutual assistance, which was drawn up as long ago as 1957. The historic reliance of our courts on oral evidence and the inadmissibility of written evidence obtained from overseas have been the principal reasons for that, not negligence, but following the changes to the laws of evidence made by the Police and Criminal Evidence Act 1984 and the Criminal Justice Act 1988, written evidence is now far more likely to be acceptable to a court, and the time has come for us to recognise the advantages of ratification and to follow the practices of others.

Dame Elaine Kellett-Bowman: Will the Bill make it easier for us to extradite citizens of the Irish Republic?

Mr. Waddington: I explained that the Bill does not deal with extradition. In recent years, we have updated our criminal justice law, including our law on extradition.
Clauses 1 and 2 deal with the service of judicial documents such as summonses. Clause 1 creates a more effective means than is currently available by which summonses and other judicial documents issued by a court overseas can be served on a person in the United Kingdom. Clause 2 is a reciprocal provision making it possible for summonses to be served on people who are outside the United Kingdom, requiring them to appear as witnesses or defendants in criminal proceedings in this country.
Clauses 3 and 4 deal with the taking of evidence in one country for use in proceedings in another. Clause 3 makes it possible for courts and prosecuting authorities in this country to issue letters of request, seeking evidence from overseas which is needed in connection with an investigation or proceedings under way here. Clause 4 enables us to respond to such requests from overseas by having the evidence requested taken in a court in this country and then transmitted back to the country which made the request.

Mr. James Arbuthnot: Is my right hon. and learned Friend aware of the slight concern that clause 4 may override a privilege that was granted by section 144 of the Finance Act 1989? I recognise that that is a rather esoteric question and it is not one on which I seek an immediate response.

Mr. Waddington: That point will be dealt with by my right hon. Friend the Minister of State in his reply. I do not think that it affects the question of privilege. The court will apply the same rules in connection with privilege as it does now. My right hon. Friend will be able to develop that point in his summing up.
Clauses 5 and 6 concern the temporary transfer of prisoners from one country to another to give evidence or to assist with investigations. Clause 5 will enable us, with the consent of the individuals concerned, to transfer prisoners held in United Kingdom prisons to another

country where they will be held in custody, brought to a court to give evidence and then transferred back to this country. By the same token we shall be able to receive on a temporary basis prisoners held abroad who are needed to give evidence in cases before courts here.
Clauses 7 and 8 enable the police in certain circumstances to seek a warrant from a magistrate authorising the use of powers of entry, search and seizure at the request of the authorities in another country to assist with an investigation or proceedings taking place there.

Mr. Tony Banks: Will the Home Secretary vet such applications himself? Will there be political supervision of such requests so that the authorities in this country can be assured that the request coming from overseas legal authorities is satisfactory and that there is a case to be answered?

Mr. Waddington: That would not be a matter for the politicians—I sincerely hope not. If it were, I am sure that many hon. Members would complain. This is a matter for the courts of the land, whether magistrates or Crown courts. Judges will decide whether the application is properly brought under the law of this land and in accordance with the convention.
In drafting the provisions, we have been guided by the principle that no more powers should be available to be used by foreign courts and prosecuting authorities than would be available to our courts and prosecuting authorities in a purely domestic case. I am sure that that will give some reassurance to the hon. Member for Newham, North-West (Mr. Banks). It is a good example of the point that I am making. With this in mind, we have set out to replicate the domestic provisions contained in the Police and Criminal Evidence Act and in Scottish common law. Thus a foreign authority will be able to ask our police to enter premises to search for evidence relevant to an investigation only if the police could act in a similar way in a domestic case.
Clause 9 deals with the forfeiture of what are known as "instrumentalities" of crime—objects used in the commission of an offence. As I have already mentioned, we have strong laws governing the confiscation of the proceeds of serious crime and have agreements with several countries covering the enforcement of each other's confiscation orders. But one thing that we are currently unable to do is to enforce orders made by overseas courts for the forfeiture of items used in the commission of serious crimes, such as a getaway car used in a bank robbery or a boat used to smuggle drugs. The clause will remedy that weakness.
I am sure that the House will recognise that the proposals I have outlined are sensible and practical, and will enhance our ability to work with our international partners in the fight against all forms of international crime. Our ratification of the European convention on mutual assistance in criminal matters will he not only a positive demonstration of our commitment to work as closely as possible with our Council of Europe partners, but a guarantee that the other parties to the convention will assist us.
Part II contains provisions that are necessary to enable us to ratify the United Nations convention against illicit. traffic in narcotic drugs and psychotropic substances. The convention is known as the Vienna convention. It begins with a code of offences of illicit trafficking, and then


provides mechanisms that enable states to co-operate with each other in bringing traffickers to justice, wherever they may be. It also provides for the tracing, freezing and confiscation of property derived from trafficking, which we already know to be a very powerful weapon. The convention also provides a framework of practical measures to assist the law enforcement agencies to detect traffickers. Clauses 12 and 13, together with schedule 3, for example, are designed to prevent the diversion to illicit use of a range of chemicals that are essential in the production of controlled drugs.

Mr. Chris Butler: Why does clause 12 create the offence of manufacturing or supplying certain substances that are scheduled, rather than simply making it an offence knowingly to manufacture substances that may be used in the illicit manufacture of controlled drugs?

Mr. Waddington: It is very much more satisfactory to list those substances that we know are used in the manufacture of controlled drugs and then include an order-making power in the Bill. The Bill could hardly cover substances that do not exist. It would be very difficult to frame a clause specifying that any substances that might subsequently turn out to be ones that could be used in the manufacture of drugs should be covered by the Bill. That is why, if my hon. Friend turns to clause 12(5), he will find that the schedule may be amended by Order in Council. I think that that is a satisfactory way of dealing with the matter.
In the United Kingdom, since 1971, we have operated a voluntary system of control whereby the companies that manufacture and supply these chemicals have been encouraged to draw to the attention of the police and the Home Office drugs inspectorate details of any suspicious orders and transactions.
That system has worked well, with admirable co-operation from the chemicals industry, and this has led to the identification of many clandestine laboratories, both in the United Kingdom and overseas. We do not see the need to switch to a mandatory reporting system on American lines. What the Bill will do, therefore, is put the current voluntary system on a statutory basis, in that it will require records of transactions to be kept and will empower enforcement officers to enter premises and demand the production of records.
Clause 14 is intended to enable us to meet the terms of article 3 of the Vienna convention. This requires parties to the convention to make it an offence to conceal or disguise property, or to convert or transfer it, knowing or suspecting it to be the proceeds of drug trafficking, and for the purpose of helping someone to avoid being prosecuted for a drug-trafficking offence. We already, of course, have a money-laundering offence in section 24 of the Drug Trafficking Offences Act 1986, but the new offence will catch the drug trafficker laundering his own proceeds, whereas the provision in the 1986 Act is about laundering the proceeds of someone else's trafficking.

Mr. Ivan Lawrence: I apologise to my right hon. and learned Friend for interrupting him, but I should like to know whether the reason for including this clause is that some drug companies have not co-operated with the Government by supplying voluntarily the information whose provision we are now making compulsory.

Mr. Waddington: A very good voluntary system operates. That is why we do not consider it necessary, in this Bill, to go through the paraphernalia of requiring notification of dealings in any of these drugs. Therefore, in the Bill we are merely providing for what goes on at present. Companies keep records of these goods and can keep authorities informed of any transactions that they believe are in any way suspicious. There is no question of our putting in the Bill anything that is unnecessary. We are including the minimum that is required to conform with the convention.
Clauses 15 and 16 will enable us to meet fully the requirement of the convention that we should ensure that the maximum possible amount of the proceeds of drug trafficking—and any income derived from them—is confiscated. To do this, we need to make two adjustments to the confiscation scheme established under the Drug Trafficking Offences Act 1986. The first is to make it possible to add interest to the amount that remains unpaid at the end of whatever time a court allows for payment when it makes an order for the confiscation of the proceeds of drug trafficking. Clause 15 achieves that. The second thing that we must do is to make it possible to increase the amount that can be recovered under a confiscation order if it turns out that the amount that might be realised is greater than was initially assessed by the Crown court. That will be achieved by clause 16.
The Vienna convention also requires parties "to co-operate" to the fullest extent possible to suppress illicit drug trafficking by sea and each party is required to establish jurisdiction over offences of illicit trafficking on its own registered vessels.
Clause 17 extends to British ships all drug trafficking offences—all those existing before the Bill comes into force as well as those that we are creating—and clause 18 creates——

Dr. Norman A. Godman: May I ask the right hon. and learned Gentleman a question in relation to clauses 17 and 18? By "British ships" does he mean United Kingdom-registered merchant vessels, United Kingdom-registered fishing vessels and pleasure craft owned by United Kingdom nationals? What is meant by an unregistered ship?

Mr. Waddington: The hon. Gentleman is entirely right in his assumption. Clearly the Bill covers all United Kingdom ships—all those that are registered as United Kingdom ships and all those that fly the British flag. But the Bill must also cover circumstances in which, negligently or for a criminal purpose, someone has failed to register his ship with any nation. There would be a gap in the Bill if provision were not made to deal with that eventuality.

Dr. Godman: But what happens to a British-owned vessel that flies a flag of convenience?

Mr. Waddington: I think that in those circumstances, the ship would be treated as a ship registered with that other country. The convention would be apt to give us the power, with the consent of the other country, to board that ship. It would also give us extraterritorial jurisdiction to bring to trial anyone on board that ship against whom there was evidence of a drug offence.
Clause 18 creates a new offence in respect of the transportation of illicit drugs which will apply to the ships


of convention countries and to unregistered ships, as well as to those registered here. Clause 18(2) provides that the offence is committed if a person knows, or has reasonable grounds to suspect, that the drugs are intended to be imported, or have been exported, contrary either to section 3(1) of the Misuse of Drugs Act 1971 or to the law of any other state.
Clause 19 and schedule 3 create arrangements whereby the United Kingdom may authorise other countries to board our ships and we may be authorised to board other ships. We in the United Kingdom do not require any authorisation to board an unregistered ship, but the Bill makes it clear that in the case of ships registered in convention states boarding may take place only at the request, or on the authorisation, of that country. Subsection (4) empowers the Secretary of State to seek such authorisation or authorise the boarding of United Kingdom vessels by other convention states. But in giving his authority the Secretary of State will be able to attach conditions. For example, he might wish to limit local prosecution of any offences discovered to ensure that they are offences broadly covered by United Kingdom law or to ensure that punishments seriously out of step with those allowed by our laws are not imposed.
Clause 21 deals with extradition and makes a number of adjustments to our laws to ensure that we are fully able to meet the requirements of the Vienna convention.
Clause 22 applies to offences created by the Bill certain provisions of the Misuse of Drugs Act 1971 in relation to existing drugs offences. For example, it extends the powers of enforcement officers in relation to searching and obtaining evidence in respect of controlled drugs to cover the chemical substances in schedule 2.
No one can doubt that the United Kingdom—indeed the whole international community—faces a terrifying prospect unless we can prevent the drug problem from escalating further. In my recent visit to the United States I saw at first hand the misery that has been wrought by drugs. The most powerful memory that I brought back with me was of a class of five-year-olds having the "say no to drugs" message drummed into them, lest even as young children they should be targeted by and fall victim to the drug pushers. In the four days I was in the United States two law enforcement officers were murdered. One murder was clearly committed because the victim was carrying out a major investigation into the activities of a drugs cartel. The other died serving a search warrant on someone not directly involved in drugs-related crime but high on drugs at the time. In the past year in Colombia, we have seen how the drug cartels have felt sufficiently sure of themselves to wage war against a democratically elected Government. President Barco's courageous stand has won universal admiration. We must make sure that he is given all the assistance that he needs to defeat these evil men who corrupt our children and the very fabric of our society.
There is no simple solution to this problem. That message came across clearly in the debates at last week's special session of the United Nations General Assembly, which adopted a comprehensive global plan of action. But any plan depends on the level of commitment given to making it succeed. In the few months since I became Home Secretary it has become clear to me that one of our top priorities must be to reduce the demand for illicit drugs, for without a market the drug barons would soon be out of business. That is why we set up the new drug prevention

initiative which will muster the forces of the communities most at risk. But we must also continue to be vigilant and energetic in reducing illicit supply.
As the House knows, the world ministerial drugs summit, which we are organising in association with the United Nations, is due to take place in London between 9 and 11 April. Particular attention will be given to how to strengthen the effectiveness of demand reduction policies. We will also examine ways of reducing supplies of cocaine—which are reaching western countries in ever-increasing quantities. We are determined that the conference should have a tangible outcome, and complement the recent discussions in New York and last month at Cartagena when President Bush met the Presidents of Bolivia, Colombia and Peru.
The need for concerted international action is also reflected in the report on drug trafficking and related serious crime prepared last November by the Home Affairs Select Committee. This is an excellent document and we shall respond shortly to its recommendations. In the meantime I reiterate my thanks to my hon. Friend the Member for Westminster, North (Sir J. Wheeler) and his colleagues for their painstaking work.
But the Bill is not just about drugs. It is. about enhancing our ability to tackle international crime generally by allowing us to work more closely with our international partners. The two conventions that the Bill will permit us to ratify are useful and important instruments and I know that our ratification will be very welcome in the international community which has long looked to Britain to take a lead in the fight against crime and has not looked in vain.

Mr. Barry Sheerman: It almost goes without saying that Opposition Members give the Bill our full support, following not only our commitment to it but the statement made by my right hon. Friend the Leader of the Opposition when the Bill was first announced. Any measures which are carefully devised and thought through, and which tackle international crime in general and the murderous trade of drug trafficking in particular, will be wholeheartedly supported by the Opposition. That applies to this Bill, which is not controversial. I shall therefore also try to be reasonably non-controversial.

Mr. Lawrence: This is an important matter and it has come to the attention of most of us that the hon. Gentleman's right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), again, is not here to hear the introduction of a Home Office Bill being presented by my right hon. Friend the Home Secretary. The right hon. Gentleman cannot still be out to lunch at 4.30 pm.

Mr. Sheerman: That was an appalling intervention. Had I known that the hon. and learned Gentleman intended to make a dishonourable reference to my right hon. Friend, I should not have given way to him. My right hon. Friend is engaged on other important business. The Opposition are used to working as a team. Part of that team is here now and doing its job. We do not rely on one figure, as the Government often so obviously do. We work as a team.
The structure and ramifications of the Bill are complex, but the objective is simple—to deal with international


drug-related crime. We believe not only that the bill will enhance the ability of the Government and their police force—and other police forces around the world—not only to tackle more effectively the increasingly sophisticated and globally active drug barons but, more broadly, that it will enable proper international arrangements to be agreed on criminal matters generally. It is important for the House to note that the Bill is not just about dealing with the drugs barons or the drugs traffickers.
Part I of the Bill relates to international crime. Again the Opposition welcome the abilities that it offers to the Government and police forces because crime is becoming global. Crime which starts off as a drug-related crime soon becomes a different type of crime as the money moves into different areas, different industries and different activities, not all of which are associated directly with the drugs trade. As the Home Secretary said, part I deals with mutual legal assistance—a formal tag for a simple procedure. It allows procedures by which states can co-operate with each other in the investigation and prosecution of criminal offences. It will allow us to ratify the 1987 European convention on mutual assistance in criminal matters, which is most important.
Our main worry about part I relates to clause 4 and specifically to a protocol to the convention which allows a foreign Government to require our Government—and which in turn allows us—to require a banker to reveal information about a fiscal matter which, while a criminal offence in the originating country, is a civil offence here. That issue arose on Second Reading and in Committee in another place and it is a point on which we seek further clarification. I stress that we are concerned that something which originates as a criminal offence in another country, especially relating to fiscal matters and to tax avoidance, may be a civil matter in this country. I know that there is a worry on both sides of the House that there could be a country somewhere in the world where unscrupulous individuals could use the provisions as a lever to gain information. That was not the intention of the protocol. I hope that the Minister of State will mention that in his reply. Certainly we shall return to the matter in Committee.
The Home Secretary will know that eight countries have signed the protocol and four—Austria, Norway, Sweden and Iceland—have expressed reservations about the fiscal provisions. If we express a similar reservation, it will not prevent us from signing the convention. We know from proceedings in another place that the Government argue that it is in our own interest to sign the convention in toto. However, we should like the Minister to give an undertaking that no future Home Secretary would allow another country's law to change our law.
Having dealt with part I of the Bill which, as I said, is the less contentious section of a Bill to which we have given broad support. Part II of the Bill, as the Home Secretary said, allows us to ratify the 1988 United Nations convention against illicit traffic in narcotic drugs and psychotropic substances. That is quite a mouthful, but we all know what it means. In short, it means ratification of the Vienna convention. There have been various treaties and conventions signed in Vienna, some of which have proved more successful in historical terms than others.
We welcome the clauses in part II dealing with the manufacture of precursors. I have talked to people in the chemical industry and the Select Committee also touched on the subject. I appreciate that it is a difficult issue, but we must attempt to control the raw materials used in processing coca into cocaine. There has been a cry from countries and from statesmen and stateswomen in south America and central America to control the sophisticated chemicals—the precursors—which come in from the United States and Europe and other parts of South America. That is a difficult matter and there is a certain pessimism in the chemical manufacturing industry about the efficacy of this measure and whether it will be the answer. Nevertheless, part of the answer is to control the flow of chemicals into countries where they are used to manufacture cocaine.
We also accept the need to tighten the law against money laundering. The Bill makes provision to tackle the illicit trafficking of drugs by sea and to ensure that drug trafficking offences are extraditable. The Home Secretary mentioned clause 21, which firms up existing provisions and improves the current position.
The one controversial aspect of my remarks involves money laundering. The Opposition are worried about this because the Bill's provisions for tightening the offence of money laundering are important and will be of great assistance to the police. I do not deny that, and no other Opposition Member would do so. However, we remain concerned about money laundering and whether the Government are doing enough about it, even in the Bill. Perhaps the Bill can be improved in Committee.
In a report published in November, "Drug Trafficking and Related Serious Crime", the Select Committee on Home Affairs said:
The United Kingdom continues to be a major centre for money laundering.
Indeed, the national drug intelligence co-ordinator, the NDIC, told the Committee that the United Kingdom
was regarded by the United States, Canada and some others as an offshore banking system.
That is a serious allegation from a body so close to the fight against drug-related crime.
That relates to some degree to the scandal of the Bank of Commerce and Credit International. The BCCI has 40 branches in the United Kingdom. In Tampa, Florida, this month that bank was convicted, having pleaded guilty, of three serious charges of conspiracy relating to money laundering and was fined between $14 million and $15 million. In a recent television programme that fine was described as a slap on the wrist for a bank involved to that extent in the money laundering business.
When I raised that issue with the Foreign Secretary recently, I was rather slapped down by the right hon. Gentleman, who was within a few days to attend a special assembly of the United Nations to discuss the drugs issue. I asked whether he thought that he might be taken more seriously at that assembly if he did something more energetic about money laundering. He replied:
The hon. Gentleman's rhetoric is about four years out of date. This Government have been the pioneers in putting the necessary legislation through Parliament, in bringing that legislation into effect, and in negotiating agreements—of which there are now 13—with countries that have followed the same route."—[Official Report, 7 February 1990; Vol. 166, c. 882.]
The right hon. Gentleman rather slapped me down, which concerned me in view of what was said the previous night—I have the transcript with me—in a BBC "Newsnight"


Programme. Hon Members who are familiar with that programme will be aware that each programme involves an in-depth investigation of a particular topic. In the programme to which I refer, the laundering of drugs money and the various ramifications involved—[Interruption.] I have faith in that programme. Indeed, unlike some Conservative Members, I have great faith in the BBC. That programme went in some depth into the Tampa case and the involvement of the BCCI. It posed some awkward questions about whether the British Government and the Bank of England were taking seriously the amount of laundering that was going on in British banks every day of the week. It is estimated that £1·8 billion of drugs money comes to this country.

Mr. Waddington: It is all very well for the hon. Gentleman to go on in that way, but may we be told what amendment to the law he is proposing? What does he say is wrong with the drug trafficking offence that we pioneered? I should have thought that he would wish to give credit for the initiative that the British Government have taken. To the best of my knowledge, we were one of the first countries in the world to create a money laundering offence.

Mr. Sheerman: I regard the Drug Trafficking Offences Act 1986, which the Opposition supported enthusiastically, as an important first step. The Select Committee and others have expressed great concern—the point was put to the Bank of England when it gave evidence to the Committee—about the amount of laundering that is going on and about the fact that the present legislation is not catching much of it.

Mr. Joseph Ashton: I was a member of that Select Committee. We visited bankers in Washington and spoke to the Customs and Excise. They expressed anger at the fact that it is possible for anyone legally to bring a suitcase full of drugs money into Britain, to pay it into a bank here and to have it immediately faxed to America. Practically every other country in the world insists that when visitors arrive by aeroplane they have to fill in a form stating exactly how much cash they have on their person and there is a strict limit—$1,000, or whatever, I am not certain of the figure—on how much they may bring in. In Britain there is no such limit—anyone can bring in any amount of money. That is why the Americans are angry about our lack of holding operations. We cannot detain people for, say, 24 hours while inquiries are made. That loophole in the law affects not just the Home Office but the Treasury. The previous Chancellor of the Exchequer refused to do anything about it because he thought it would interfere with currency control.

Mr. Sheerman: I am obliged to my hon. Friend for that intervention. I was making precisely that point. We are not against the 1986 Act, but it is clear from the Select Committee report that that measure is not catching the big money. Sums as large as £15 million to £20 million are relatively small in terms of the huge amounts that are still eluding the net.

The Minister of State, Home Office (Mr. John Patten): A few moments ago my right hon. and learned Friend the Home Secretary asked the hon. Gentleman to explain not just his criticisms of the present situation, which we understand, but what he proposes should be done. What are the Labour party's proposals?

Mr. Sheerman: In addition to the points made by my hon. Friend the Member for Bassetlaw (Mr. Ashton), we believe that the Government should have responded faster to the Select Committee recommendations, which were published last November. It was clear from the evidence given by the Bank of England that the Government ought to take urgent action so as more effectively to catch drug laundering money.

Mr. John Patten: The Labour party has no policies a t all.

Mr. Sheerman: The Government should act following an investigation by an all-party Select Committee which exposed the scandal of Government inaction over the laundering of drug money in the City of London. The Government have not yet acted on the Select Committee's recommendations almost three months after they were made.
Although we support the Bill, we are entitled to criticise aspects of it. If we need more legislation, let it be enacted. Our fear is that the Government, who historically feel tenderness towards the City, are frightened to take the City on strongly, including telling the Bank of England that the present state of affairs is a scandal and telling the Foreign Secretary, the Chancellor of the Exchequer and the Home Secretary that something must be done.
Ministers ask about Labour policies in this sphere. New policies already exist in the form of the Select Committee's recommendations. If the Home Secretary would only act on them there would be a great improvement in the situation.
The national drugs intelligence co-ordinator estimates that £1·8 billion is received into the United Kingdom as a result of drug trafficking. The NDIC stated in a memorandum that vast sums were circulating in the legitimate banking system and might
have a destabilising effect on the smaller financial institutions.
Those sentiments have not been conjured by by me. They come from a leading expert at the sharp end of these issues. The NDIC said that, despite the 1986 Act, the United Kingdom continued to be a major centre for laundering money. I reiterate that many countries facing this problem see Britain as an offshore banking centre.
That being so, it is no use the Home Secretary and his junior Minister being complacent. They are the responsible Ministers, they have the Select Committee report, and they should be aware of the worries that have been expressed by their officials who, I believe, are urging them to take action. Unfortunately, the Government are weak when it comes to facing City institutions. It is about time that someone kicked the Bank of England. If the Home Secretary will not have a go, he should step down. If he thinks that it is the Opposition's job, let the Government resign and we will start doing the job properly.
Some of us are worried about how effective the 1986 Act has been. I do not want to labour the point, but the laundering of drug money is the cornerstone of the drug trade. If we can deal with that, we shall have largely solved the supply-side problem. The Bill does not deal with the demand-side problem, on which the conference that the Government are hosting in London in April will focus, but if Britain can take the lead in a United Nations effort and do something about the laundering of drug money, the drug trafficker will find life much more difficult.
The laundering of drug profits through the legitimate banking system was the most disturbing part of the Select Committee investigation. When the Bank of England was asked by the Select Committee what further measures it would recommend, it could not think of any. That answer jumps out at us from the page. If the Government told the Bank of England to suggest proposals which would effectively prevent London from being a centre for the laundering of drug money, it would come back with effective measures which could be implemented quickly.
This is not a party political point. I am simply saying that it could be done. It must be possible to stop the laundering of such money and the Bank of England should have the expertise to advise the Government to do so.
We support the Bill and we shall give it a fair wind on Second Reading and in Committee, but we shall not let the Government off the hook if they refuse to give the City the big kick up the backside that it deserves with regard to the drug money laundering scandal.
This is the most controversial part of my speech and I know that the Home Secretary and the Minister of State do not like what I have said. Nevertheless, it is three months since the Select Committee published its report, so why have the Government not called in the Bank of England and told it to produce solutions? Will the Home Secretary talk to his Cabinet colleagues and find out what they are doing about the Bank of Credit and Commerce International and other banks suspected of being up to their elbows in this kind of money laundering?
The Government's decision, to judge from remarks made in another place, to shift the burden of proof rather than reversing it is welcome and is to be commended. To reverse it would be a far-reaching change in our criminal law and a dangerous precedent.
We shall be going into the detail of the Vienna convention in Committee, but I will deal with two important aspects now. Article 5(b) provides that, when acting on the request of another party, special consideration may be given to concluding agreements or contributing the value of confiscated proceeds to intergovernmental bodies specialising in the fight against illicit traffic and drug abuse. To put it more simply, if a lot of money was recovered after an international operation, it should go not into various Government's coffers or the Consolidated Fund but into a special fund to provide the resources to do the job even better. The Select Committee got that right.
I would go further than that and say that the Home Secretary should also talk to the Chancellor of the Exchequer because money recovered in Britain could be used to give a wonderful incentive to police officers and other intelligence people. They may not need that, but it would be a marked advance if money recovered from a sophisticated operation, taking many man hours and a great deal of time, energy, effort and money, went back to the police departments and investigative agencies involved. That is a simple but important concept.
A drug informer who had been a constituent of mine for a year, who was not guilty of or charged with any offence, gave information which led to the recovery of an enormous amount—three large hauls—of cocaine. I had to fight long and hard to obtain recompense and a new identity for him, and it was only after many months that

I achieved that. It was not that people, having wickedly used the man, said that he could get on his bike and go, but the Home Office and the police said that there was no money available to pay for that. Progress has been made in the past two years and more money has been made available, but there is still not enough cash to fight the drug menace. Preventing the proceeds of such operations from slipping back into the Consolidated Fund would mean extra cash to fight the drug menace. It would be nice for poll tax payers facing a 13·5 per cent. increase to pay for the police to be able to think that a big recovery of drug money would go back to those who had had to spend money providing the expertise necessary to make the operation successful.

Mr. Waddington: rose——

Mr. Sheerman: Before the right hon. and learned Gentleman says anything else, will he comment on the rumour that there are millions of pounds locked up in Washington which the United States Government would like to give to the Metropolitan police but that at present there is no mechanism to do so? Will that money be payable to the Metropolitan police when the Bill is enacted?

Mr. Waddington: I sought to intervene to remind the hon. Gentleman that some time ago the Government announced that provision is being made in 1990–91 for a central fund to meet some of the additional costs of international drugs investigations by the police—including rewards to major informants—out of the seizures of illegal drug assets.

Mr. Sheerman: I thank the Home Secretary for that. I acknowledged that steps have been taken, but if money recovered flowed into such resources it would make operations against drug barons even more effective. I take the Home Secretary's point. That fund did not exist when I was battling for my transient constituent. Nevertheless, it should be a great deal more.
The Government should make it clear that confiscated funds should help towards the overall effort. The Select Committee recommended that such funds should go to a central fund administered by the Home Office. That is an excellent recommendation. I hope that the Home Secretary will respond positively in the short run. Money could then go back to the investigating agencies and—I hope that the Home Secretary will look warmly on this—to rehabilitation and education programmes. The Home Secretary has much to gain from having common cause with the Secretary of State for Health. Part of the money should go to fight the war against the drug barons and part to the education and rehabilitation programme which is so under-resourced.

Mr. Waddington: How much would the Opposition dedicate to that programme?

Mr. Sheerman: I am saying that we would——

Mr. Martin M. Brandon-Bravo: Answer the question.

Mr. Sheerman: I am in the middle of an answer. I do not need the Parliamentary Private Secretary to tell me how to answer a question. I was about to say that I have already given the policy. The policy is that a fund should be built up from the proceeds of cracking the illicit trade. Many


millions of pounds could be used in that way. After the next election a Labour Government would take that course.

Mr. Waddington: That is not an answer to my question. If a fund is built up from money seized, that money could be used for a variety of purposes. As the hon. Gentleman is apparently criticising the budget available for education and rehabilitation, we are entitled to know what budget he has in mind and how much the Opposition would spend.

Mr. Sheerman: The point I am trying to make is that we want a substantial appropriation of funds for education and rehabilitation programmes because the drug problem is tremendously important and we have not yet taken it seriously. In a moment I shall refer briefly to demand reduction. The Home Secretary and his colleagues like to appear on television making dramatic gestures. I want to give him the opportunity to say that the drug fund would go partly towards pursuing the criminals more effectively and partly to picking up the pieces in society which result from the ghastly, murderous trade. Young children could he educated so as to prevent them getting under the thrall of drugs. There could also be educational and rehabilitation programmes for the victims of drug addiction.
In volume II of the Select Committee report, page 160, the Home Office memorandum says that article 2 of the United Nations convention makes an important point about sovereignty. I hope that the Home Secretary will bring it to the attention of the Foreign Secretary. According to the memorandum, the convention
may even be helpful in countering the exorbitant claims to jurisdiction often made by the United States
That was well said. Anyone who has spent time in south America will know that the people are sensitive about the United States using one rule on jurisdiction in one part of the globe and another in south America.
Article 14 of the convention relates to measures to eradicate the illicit cultivation of narcotic plants and the illicit demand for drugs. That is a worthwhile section which will be difficult to carry out. Hon. Members who take the matter seriously are worried about simplistic solutions. In a peasant economy such as Peru or Colombia, it is wrong to burn the fields of coca or attempt to introduce a caterpillar or beetle to destroy the coca crop without knowing what damage may be caused to other crops. I hope that the Government will take a positive attitude.
These matters do not relate just to the Home Office. If we are to do anything about the supply, right back to the grower, we have to face the fact that we spend very little money on overseas aid to south America. There was a little extra last year but aid for the whole of south America is only about £12 million. People in the West must get the message that they cannot burn or spray the crop from helicopters or introduce beetles to destroy it. We must offer people in the Third world alternative markets, alternative crops and alternative ways of earning a living. The simplistic solutions tried by some western countries have had appalling effects on the population.
I know only one south American country well—Peru. When one sees the poverty in Peru, one is not surprised that the peasants are forced into coca production when that is the only thing that they can grow. They must be

given a genuine alternative. That does not come from helicopters or from slogans but from resources being put into alternatives to make the economy work differently.
Article 14 states that measures taken to prevent illicit cultivation should respect fundamental human rights. It puts a finger on an important point. If we are to have respect for human rights, we must give them the proper environment in which to flourish.
Article 14 also refers to the protection of the environment. We may talk glibly about the protection of the rain forests and about global warming, but we cannot criticise people who are struggling to make a living when we in the West shot the buffalo and killed half the animal species in the world when we were industrialising, and we are still the worst polluters. So when we talk about protection of the environment, we must do so sensitively.
I remember being shown the front page of the leading newspaper in Brazil the morning after a European initiative which criticised the damage to the environment caused by cutting down the rain forests. South American countries do not want to be patronised. They want to be talked to intelligently so that we and they can find solutions together. Article 14 is a valuable safeguard against spraying crops, the introduction of grubs, and so on.
I wish to conclude on the subject of demand reduction, although it is not covered by the substance of the Bill. While the Bill is important, it deals with only half the problem. Some people regard that half as the least important part of the problem because demand reduction is the most effective way of reducing the drug menace. The convention relates basically to the supply side, but we must not be preoccupied with that to the exclusion of demand at home.
When last week I criticised the Home Secretary for going to the United States, I did so constructively. He should have gone to other countries in Europe which, because of their experience, would have much more to tell us about drug culture than the United States. The experience of the United States is special in one sense, and I thank heaven it is. If the Home Secretary were to talk to his opposite numbers in Germany, Holland and France, he might learn much more than he did on his trip to the United States. The United States, to its cost, made the mistake of concentrating on the supply of drugs and did not put enough effort and resources into demand reduction until it was too late. To stem the flood of drugs, it is more effective to stem the demand from people who use the stuff than to stem the supply.
We can talk as much as we like, and we shall give the Bill a fair wind—it will not take long to get through the House—but this is a complex matter and the problem will not be solved by one short Bill or Act. Drug addiction and the drugs problem are related to supply and demand in terms of their causes. For example, I have mentioned that on the supply side there is the question of what peasants have to do in certain countries of the world. On the demand side, the drug problem is rooted in poverty, deprivation and unemployment.

Mr. Waddington: If the hon. Gentleman is right, why was there not more drug taking between the wars? If he is right about deprivation, why was there not a greater drug problem when there was far more deprivation? He is talking nonsense.

Mr. Sheerman: That is the most depressing remark that I have heard from the Home Secretary since he took office. All the informed opinion dealing with drugs and drug addiction has stressed time and again that the problem is related to deprivation and to the poor parts of our cities and towns. I am not saying that as a Labour supporter—across the political spectrum, people who know about the drugs problem are saying that. One can track it and trace it and see the hot spots in our country.
In the 1920s and the 1930s, between the wars, like most fashions it was high society and the upper classes in this country who were the drug addicts and who were involved in drug taking. The problem was small. The Home Secretary shakes his head. Yet he used to have some claim to being a social scientist—[Interruption.] Well, he was a geographer and they sometimes claim to be social scientists. We could have a debate about whether geography has any claim to scholarship, but not today.
I answer the Home Secretary by saying that fashions begin among small sections of the population and are perhaps harmless. When they spread down to a large section of the population who do not do it as a quick thrill and then move on, it becomes a different problem. That is what has happened in the United States and it is certainly what has happened here.
I repeat—and I beg the Home Secretary to think again—that the root of the drugs problem is in deprivation and misery, and unless the Government do something about that they will never tackle the problem completely and comprehensively.

Sir John Wheeler: I shall begin by using some of the words of the hon. Member for Huddersfield (Mr. Sheerman). He is right to say that the extremely complex question of drugs and the control of drug-related crimes will not be solved by simplistic solutions.
The hon. Gentleman leaned heavily on the work of the Home Affairs Select Committee in his speech this afternoon. However, it seems to me that he failed to respond and to suggest what additional improvements he would make to the criminal law to deal with some of the issues. I do not mean to say that in a partisan way, but perhaps the Opposition would have been assisted if the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) had been present this afternoon to lend his knowledge, skill and interest in the subject to the debate. Perhaps he would have answered some of the questions posed to the hon. Member for Huddersfield, and which—I say this in a kindly way—he understandably was unable to answer.

Mr. Sheerman: I am surprised that the Chairman of the Select Committee on Home Affairs makes that point. My right hon. Friend is the deputy leader of our party, as well as the home affairs spokesman, and that imposes a great range of duties over and above the duty of being shadow Home Secretary.

Sir John Wheeler: I am grateful to the hon. Gentleman but I repeat—in as non-partisan a way as I can—that the most important duty upon hon. Members is to attend the House and to participate in debates, particularly about issues as serious and important as this one. I leave it at that.
I greatly welcome the response to the Home Affairs Select Committee report from my right hon. and learned Friend the Home Secretary and my right hon. Friend the Minister of State. The Home Affairs Select Committee can claim to be the one Committee that receives almost instant, but considerable, response to its recommendations. My right hon. and learned Friend responded within 14 days to the Select Committee's report on the Criminal Injuries Compensation Board scheme, and handsomely so.
Today's debate is in part a response to the recommendations made in November 1989 to the Home Office by the Select Committee in its report on serious crime and drugs. I know that my right hon. and learned Friend has to respond to the other recommendations in that report as soon as possible—no doubt soon after the conclusion of the debate today.

Mr. John Patten: My hon. Friend has been extremely courteous about the rapid response that the Home Office always tries to give to Home Affairs Select Committee reports. He cited the recent report on the Criminal Injuries Compensation Board scheme. However, today we are debating, in part, the Select Committee's report on drugs. Does my hon. Friend agree that some of the recommendations of his Committee, such as those impressing upon us the need to ratify the 1988 United Nations convention against illicit traffic in narcotic drugs and psychotropic substances, and the 1957 European convention on mutual assistance in criminal matters, are already dealt with in the Bill?

Sir John Wheeler: My right hon. Friend is absolutely right. The Committee made those recommendations in November last year, and in the brief intervening period since his Department was able to consider the recommendations.
To use the phrase of the hon. Member for Huddersfield, these are complex matters which cannot be dealt with on a simplistic basis. My right hon. and learned Friend has considered the issues, consulted the Law Officers of the Crown and the many other agencies involved, and has come forward with a Bill which I am delighted to learn will enjoy the support of the whole House, subject no doubt to some debate in Committee. It will put on the statute book the recommendations of the Select Committee which we believe—on an all-party basis—are central to the war against drugs and serious crime. I am grateful to my right hon. and learned Friend for the way that he has responded.
I shall go through some of the issues, and touch upon some of the matters raised in the debate so far, including money laundering and the role of the Bank of England.
The Select Committee concluded that one of the most serious policy issues facing the Government and the country as a whole was that of drugs and drug-related crime. We therefore undertook an inquiry into the subject last year. We were so concerned about what we discovered about the threat of crack that we published an interim report in July 1989, to which my right hon. Friends have responded, and we followed it up with a more substantive report in November last year.
In the later report, we made it clear that we were in no doubt that law enforcement had a major role in countering the problem of drugs and serious crime, although it is not the only answer: demand reduction and the operation of the health services are also important. We also made it


clear that we were entirely opposed to the legalisation of illicit drugs, which we believe would undermine all aspects of the British strategy for tackling drugs—a strategy that the Government have well in hand.
The report stated—and the Bill echoes it—that drug trafficking is, by its nature, an international problem. It requires international action. We examined several aspects of international co-operation, and concluded that the 1988 United Nations convention against illicit traffic in narcotic drugs and psychotropic substances represented a milestone in international co-operation. We said that the British ratification of the treaty, which will require changes in the law, was a matter of great urgency. I am glad that the Bill has responded to that need. The report also discussed ways of combating the problem of money laundering, which has already been mentioned today. Drug trafficking, we said, is extremely lucrative and drug traffickers are motivated by greed.
The hon. Member for Huddersfield is right about the poverty in some south American countries. Where he is wrong, I think, is in suggesting that the people who live in poverty there are the same people who benefit from the drugs industry. They gain very little from it; those who gain most are people who live in other countries—principally the United States—and those involved in the manufacture of drugs and their movement round the western countries.
The report went on to say that success in tracing and confiscating assets is an important aspect of the campaign against the drug trafficker. Tracing and seizure would be more effective if some of the measures in the Bill were implemented. We suggested that the proceeds of drug profit confiscation should go to a central fund administered by the Home Office: my right hon. and learned Friend has yet to respond to that part of the report, but I know that he will do so shortly. We also spoke of the importance of intelligence gathering and effective law enforcement, within the United Kingdom and elsewhere in the European Community. After Easter, the Committee will turn its attention to policing co-operation in the Community in the 1990s.
The Committee recommended that the Government should
instruct the Bank of England, as a matter of urgency, to examine the scale of the threat to the banking community posed by money laundering and any legislative or other changes required to counter it. We expect the banking community and others with relevant expertise to co-operate fully with this investigation. The Government should then come forward with the necessary amending legislation as a matter of priority.
I note that the hon. Member for Huddersfield was unable to produce any amendments to the law. That may be because, having read the Select Committee report, he discovered that those who gave evidence believe that British banks, building societies and other related financial service industries were co-operating to the fullest extent with the police and customs authorities in this country.
Our problem is not a failure to co-operate on the part of the banking institutions, but the more complicated question of how money is laundered internationally through the world's banking economy. It would be simple indeed if we could identify a block of money in a bank in the United Kingdom as having originated from the proceeds of illicit drug trafficking; in that event, the existing 1986 Act and this Bill would together deal with the problem.
The problem for the banking authorities is that money moves from country to country, and from one company or place of origin to another, and it is difficult for the receiving bank to identify precisely the ultimate owner of a block of money in an account. If we could discover that, it would be relatively easy to deal with the consequences.
I believe that the Bank of England must give a lead. I hesitate to suggest what it should do, but I suspect that it should cancel a licence for a bank in the City of London. Again, I hesitate to nominate a candidate, but let me venture to observe that if the world contains a bank whose principals—either directors or senior and responsible managers—have been convicted of being knowing parties to money laundering, that bank may be such a candidate.
Until those who sit on the board of a bank, or who have an executive responsibility for the management of its affairs, fully comprehend that their shareholders' interests—and its future as a bank—rest on their personal integrity and their accountability for the management of its activities, they may be tempted not to address the problem of where the money goes as seriously as we would wish. It is not for my right hon. and learned Friend, or for the Government, to instruct the Bank of England about what it should do. The Bank of England will have to accept that responsibility and take a decision.
I suspect that there will be accountability only when the Bank of England cancels the licence of a bank to act as part of the United Kingdom's banking community. But we must remember that no advantage would be gained if the bank simply shifted its operations to Paris, Frankfurt or elsewhere. The same money laundering would occur throughout the world's economic system. The Bill would strengthen international co-operation between European Economic Community countries, the police and other enforcement agencies in an effort to prevent that from happening.
I warmly welcome the proposals. They represent an important contribution to the Government's efforts to deal with international crime, especially drug trafficking. I know that my right hon. and learned Friend has visited the United States and that he has seen what I saw when I visited Washington—the impact of drug trafficking on a community and the immense destruction that it causes. I know that he was as horrified as I when he saw how young people were drawn into this evil habit and then became drug traffickers. I was present when the Washington police arrested a notorious drug trafficker—a boy of 12 who was adept at managing his business on the streets of Washington.
One also has to consider the awesome consequences for the tens of thousands of babies who are born to crack-addicted mothers, many of whom will have to he cared for in institutions for the rest of their limited lives. The problem is so serious as to require us to go to the limits of the criminal justice system. We have to achieve a correct balance between the rights of individuals and the needs of society as a whole. We enshrined an important principle in the 1986 Act by requiring the banking community to reveal the contents of bank accounts when it was believed that the proceeds related to drug trafficking. No one now believes that that was wrong. We wish to build upon that principle. However, we shall be successful only if we understand precisely the implications of all the decisions that we make and only if we win international co-operation, particularly in Europe.
The Bill is a response to the Select Committee's recommendations in November 1989. It will ensure that these important developments continue. I welcome the Bill. The sooner it reaches the statute book the better.

Dr. Norman A. Godman: I shall be extremely brief, Madam Deputy Speaker.
I congratulate the hon. Members who served on the Select Committee on their first-class report. As a comment on drug-related problems and crime that is activated by drugs, I wonder how many people died last year in the United Kingdom as a result of their addiction to crack, cocaine and heroin, compared with those who died as a result of their addiction to tobacco and all forms of alcohol.
The laundering of money is a major criminal activity which has gone largely unchecked in the United Kingdom. That problem must be tackled more rigorously and in a much more tough-minded way. I hope that the Minister of State, the right hon. Member for Oxford, West and Abingdon (Mr. Patten), will answer two questions. I am pleased about the contents of clauses 17 to 20, whose object is to tackle more effectively the problems that are associated with the seaborne trade in illicit drugs. That is very important for Scotland, given the plethora of islands and its extensive coastline.
I ask the Minister to look again at those clauses. I am not a lawyer or a parliamentary draftsman, but I am a little concerned about the definition of a British-owned ship—hence my earlier intervention during the Home Secretary's speech. That vague definition needs to be tightened up when the Bill is considered in Committee. I ought to point out to my hon. Friend the Member for Huddersfield (Mr. Sheerman) that I do not expect to receive an invitation to serve on the Committee.
This is an important question; the Minister of State has with him a platoon of civil servants who may be able to answer it. How do clauses 17 to 20 relate to clauses 3 and 14 of the Merchant Shipping Act 1988? On October 1989, the president of the European Court of Justice took issue with Her Majesty's Government on the definition of a British-owned ship. According to his interim injunction, the Government had to suspend the use of the term "British-owned" in section 14 of that Act.
Why is there no mention in clause 20 of Scotland's Law Officers? Clause 20(1) refers to the United Kingdom. Reference is made to England, Wales and Northern Ireland in subsections (2)(a) and (b), but there is no mention of the Crown Office, or the role of the procurators fiscal. Absence of any mention of the Crown Office is particularly noticeable to me.
I promised you, Madam Deputy Speaker, that I should be brief. I hate to break promises to you, especially when you are sitting in that Chair. Schedule 3 relates to enforcement powers in respect of ships. I take it that, in addition to police affairs and Customs and Excise officers, the definition of an enforcement officer includes members of the fisheries protection service employed by the Department of Agriculture and Fisheries for Scotland and to members of the Royal Navy who may be called upon to apprehend a vessel in, I presume, United Kingdom, not British, territorial waters.
Under the terms of the Bill, will those enforcement officers have the right to continue the pursuit of a perceived transgressor into international waters or the waters of those nations whose coastlines front the North sea or the waters of European Community states? I understand that, under the treaty of Rome, we have joint control over the waters surrounding our coastline.
In conclusion, I am slightly concerned about the wording relating to unregistered ships. Can I assume that consultation took place with officials and elected representatives of other states within the European Community and bordering the north Atlantic? The highest degree of co-operation is required with law enforcement agencies, particularly the maritime divisions of those agencies, in the pursuit of those who would conduct seaborne trade in those dreadful drugs.

Mr. Chris Butler: I welcome the Bill, which will enable us to ratify the Vienna convention, and I should like to associate my welcome with that of my hon. Friend the Member for Lewes (Mr. Rathbone), the chairman of the all-party drugs misuse committee, who unfortunately is not able to be with us this evening. I know that he would have wanted to support the passage of the Bill with all his energy and commitment.
My right hon. and learned Friend the Minister of State, Home Office, the Member for Putney (Mr. Mellor), said earlier this year:
There has never been a year when more effort has been made by the trafficker to bring his wretched product into Britain.".
Britain is not only a major consuming country for drugs; it is a major transit country. In 1989, our customs seized £259 million worth of illegal drugs—40 per cent. up on the previous year. The cocaine market in the United States is just about saturated, and increasingly the international drug barons are targeting the United Kingdom and Europe for a new market.
Over the past four years, cocaine seizures in Europe have risen by 600 per cent. From the peasant who grows the coca leaf in south America to the street trader in drugs, the mark-up is about 12,000 per cent. That enormous profit does not go to the peasant grower, whose life remains marginal; it does not even go to the pusher on the street, God damn him. It goes to the international drug baron and his cronies. A determined international effort is needed to uproot him.
We now have an example of how a determined international effort can work. I learnt on the news last night that "the extraditables" are now offering themselves up and surrendering to the Colombian Government, provided that they are tried in Colombia. That is a massive step forward. The Economist would never have believed it.
Some of us who were brought up on "Fabian of the Yard" and programmes such as "No Hiding Place" have quite a respect for our police system and our courts of law, so it was rather a shock to me, when I served on the Committee on The Criminal Justice Bill to find that our extradition procedures were so deficient. The Criminal Justice Act 1988 made useful progress, but it is embarrassing that we have not yet ratified the European convention on mutual assistance in criminal matters. That was established 33 years ago, perhaps even before "Fabian of the Yard". As we begin to co-operate more, partly


through the passage of this Bill, others will be more inclined to co-operate with us in the international battle against drugs.
I welcome the measures in the Bill to clamp down on precursor substances. The so-called producer countries, rather paradoxically, blame the West for their problems, because the West produces the demand for their drugs and the developed countries produce the chemicals that make up the drugs. The ex-President of Colombia said in 1989:
Our efforts to reduce the supply of refined cocaine also depend on international co-operation in stopping the illegal trade in chemicals which are essential to the processing of this drug. Generally, much attention is given to the production and processing of drugs … Unfortunately, in contrast, little attention is given to controlling the supply of chemicals which are used to process cocaine and which come mainly from North America and Europe. None of these are manufactured in Colombia—all of them are smuggled into our country. Tightening controls on the manufacture and sale of these chemicals, as well as strengthening sanctions against their illegal shipment, must be one of our highest priorities. It takes more than coca leaf to produce cocaine. Without the chemicals there would be no narcotic".
I welcome clause 12, but I am inclined to ask my right hon. Friend why we have to schedule the precursor substances; why not make illegal all the substances which are used knowingly to produce illicit drugs?
I was then drawn to clause 13. I accept that scheduling is probably required to control the trade in these substances, but I do not see why it is necessary to schedule the substances for control in clause 12, as one always runs the risk of the list not being exhaustive. Casting my eyes over the list, I thought that I might have noticed that one or two chemicals were missing, such as urea. I accept that they could be added later, but there is here a potential deficiency in the Bill that could be examined more closely in Committee.
Clause 16 closes an important loophole in the Drug Trafficking Offences Act 1986 so that we will now be able to confiscate ill-gotten gains that have been concealed until late in the day. That Act has proved its worth. Last year, some £15 million-worth of assets were seized.
We are in a competitively communautaire world, and I should like to take the opportunity briefly to berate Holland, Spain and Portugal, as they have dragged their feet on producing similar legislation. However, I share a major criticism with the hon. Member for Huddersfield (Mr. Sheerman) about the operation of the Bill. The money seems to disappear back into the maw of the Exchequer. Police resources which are likely to be further stretched by the operation of the Bill will not be boosted.
There is indeed a case for recycling some of the money to reduce demand. In my own town of Warrington, the drug dependency unit is severely stretched and could greatly benefit from recycling some of the money. There is even an argument for recycling some of the money to producer countries when they have been instrumental in any arrests that have been made.
The bugbear is the old Treasury doctrine of hypothecation. The preamble to the Bill says:
The overall costs are likely not to be significant and to be more than offset by the increased revenue from confiscated assets.
The principle of hypothecation is broken in the preamble to the Bill. I hope that in practice it will be broken and that there will be proper recycling of moneys to fight the drug trade.
In previous speeches on drugs, I have called for the establishment of a national force to fight the drug barons,

which, given my liking for Eliot Ness, I have tended to call "the Untouchables". I do not know whether Sir Peter Imbert reads my speeches, but I gather that he has called for a national operational arm to engage in the fight against drugs and international crime.
We should put aside regional jealousies in the fight against international criminals. I hope that my right hon. Friend the Minister will be able to signal some favour to that general idea.

Mr. Ivan Lawrence: I do not agree that regional jealousies interfere with the activities of our superb police forces, although there is an argument for increasing centralisation of drug enforcement procedures.
Like my hon. Friend the Member for Warrington (Mr. Butler) and other hon. Members who have spoken, it is not possible for me to do other than to welcome the Bill warmly. It recognises that, in criminal matters at least, we are no longer an island entire of itself; we are part of an international community, and our criminals are part of an international fraternity of criminals. All states that operate under the rule of law must act together to combat crime; otherwise, the forces of good will not prevail over the forces of evil.
Nowhere is that more true than with drugs. The raw materials for many drugs may be grown abroad and there may be distribution abroad, but there is also distribution here. There is manufacture abroad and here; there is consumption abroad and here; and the proceeds are laundered abroad and here. It comes as a surprise that, after so many years and so many international conferences, conventions, resolutions and legislation, so many loopholes and deficiencies make enforcement of the rule of law so far from complete, and not only in the drugs field.
It comes as a surprise to some of us to learn that we cannot serve on individuals in the United Kingdom summonses relating to another country's criminal proceedings, or it on ours, and that we cannot always obtain evidence from foreign countries to advance an inquiry here, of they from us. There have been notable cases of that, such as when the Swiss were reluctant to assist us in our inquiries until the point was reached when we could charge individuals, when they relaxed some of the restrictions that protect their banking system. International co-operation on such matters definitely needs to be improved.
It comes as a surprise that we are unable to transfer our prisoners to give evidence in foreign proceedings, or that foreign countries are unable to do likewise with us. 11 comes as a surprise that our police canot search and seize on behalf of other countries and that court orders for forfeiture of cars, guns or other equipment used in criminal offences abroad cannot be made here.
We passed the Drug Trafficking Offences Act 1986 to fulfil a promise to seize the proceeds of drug-related crime. It appears from this Bill that we did not draft it properly or well enough. I did not realise that it was not an offence for a person to manufacture a scheduled substance or
to supply such a substance to another person, knowing or suspecting that the substance is to be used in or for the unlawful production of a controlled drug",
which is the essence of clause 12. I am pleased that we are now making that an offence.
I had no idea that we had no power to enable enforcement authorities to obtain intelligence about drugs and chemicals from those who produce them. I am relieved to hear that the drug companies have given that information voluntarily, and that it is only to comply with the convention that we are making the matter statutory.
Everyone except the drug offender will be in favour of tightening the laundering proceedings. Most of the defects in the law I suspect, arise in detection and enforcement rather than in the framing of the exact law. I shall read section 24 (1) of the Drug Trafficking Offences Act—I cannot remember whether the House was better attended by lawyers at that time—to remind hon. Members of precisely what we are capable of drafting:
Subject to subsection (3) below, if a person enters into or is otherwise concerned in an arrangement whereby—
(a) the retention or control by or on behalf of another (call him "A") of A's proceeds of drug trafficking is facilitated (whether by concealment, removal from the jurisdiction, transfer to nominees or otherwise), or
(b) A's proceeds of drug trafficking—
(i) are used to secure that funds are placed at A's disposal, or
(ii) are used for A's benefit to acquire property by way of investment,
knowing or suspecting that A is a person who carries on or has carried on drug trafficking or has benefited from drug trafficking, he is guilty of an offence.
That section cries out for clarification, and it is welcome that we are doing so.
I was a little unkind in interrupting the speech of the hon. Member for Huddersfield (Mr. Sheerman) to ask whether the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was on his way here. Perhaps I can make amends by supporting to a small extent a point that he was making about the feebleness of banks in dealing with laundering.
I remember that, in the Brinks-Mat gold bullion case, hundreds of thousands of pounds of gold were being taken every day to a branch of one of the leading high street banks, which paid out hundreds of thousands of pounds daily. The gold was being provided by a small trader, yet no one suspected that it might be the proceeds of the gold bullion robbery which everyone was talking about and which was all over the newpapers. There has been suspicion about some banks' lack of enthusiasm in spotting money movements in drug laundering cases as well.

Mr. Sheerman: rose——

Mr. Lawrence: I was about to say that the hon. Member for Huddersfield probably went over the top in his attack on the banking system, but it appears that he is about to go even further over the top.

Mr. Sheerman: The point I was making is that £15 million of an estimated £1,800 million is a small percentage. I was trying to highlight the fact that we could do better and that we should expect the Bank of England to know which mechanisms it could introduce to make the high street and commercial banks more responsible in their attitudes, starting with the scandalous activities of a few banks, which should be dealt with quickly.

Mr. Lawrence: I take that point. However, it is more a matter of those who are dealing with the money having a

feel for inquiry, rather than having statutory rules laid down specifically for application in every case. The hon. Member for Huddersfield has made his point, and I have done my small bit to give it some support.
I like the tightening up of confiscation orders under clause 15, so that a defendant cannot delay payment of £2 million to make about £100,000 in six months for his family and friends to enjoy. That is a sensible development.
Enabling full co-operation to take place to suppress illicit drugs being carried by ship is constructive and will, I hope, be effective. I must say, though, that one gets the impression that the coastguard and Customs and Excise forces do a very efficient job in stopping this country being invaded by drug smugglers merely because it is an island.
I want to remain in order, so I shall not be tempted to stray from the provisions of the Bill to the wider consideration of international co-operation and drug control. However, some further tribute should be made to the Government for their work to reduce drug crime and the scourge of drugs, which can so easily destroy not only the lives of individuals and children, but the fabric of our nation and the civilised world itself.
The Government have been working with locally based drug prevention teams, stimulating community action from which only good can come. They have been developing an anti-drugs campaign since it was spearheaded by my right hon. Friend the Prime Minister. Money is spent on the distribution of information to schools and education institutions. There is active assistance in getting producer countries to reduce the growing of opium and cocaine, which was referred to by my hon. Friend the Member for Warrington, South and others. We are the fourth largest donor to the United Nations fund backing enforcement programmes internationally.
The number of customs investigators has been trebled to 400 since 1979, and 450 other customs staff have been allocated to drug-related work. There is the national drugs intelligence unit, about which observation has been made, with its 17 new police regional crime squad wings all co-operating within a national organisation.
There were 38,000 seizures in 1988, which is an increase of 25 per cent. over 1987, and, if my hon. Friend the Member for Warrington, South is right, a 40 per cent. increase last year over the year before. The enforcement measures of our laws resulted in a record 30,500 convictions last year, which is an excellent record of anti-drugs activity by the Government, who are not complacent and who believe that more needs to be done.

Mr. Stuart Randall: I have heard that shopping list before. One always wants to encourage all efforts, but has the hon. and learned Gentleman fully thought through the whole argument about whether the Government have been successful? Although several measures have been taken, and although there is a lot of complimentary talk, the rate of drug-taking and drug abuse is growing phenomenally. How does the hon. and learned Gentleman square those two facts?

Mr. Lawrence: A great deal of effort is being expended by the Government in stopping that growth, and I have no doubt that much growth has been stopped. I am not saying that it is sufficient for the Government. The Government are not saying that it is sufficient; nor are they being


complacent. I am sure that they will continue to tackle the problem in the resolute manner in which my right hon. Friend the Minister addresses every problem. I want to pay tribute to the Select Committee on Home Affairs for its report and recommendations, which I hope will be taken up further in the months ahead.
Through the Bill, my right hon. and learned Friend the Home Secretary will reduce the possibility that criminals can cross national borders with impunity. I hope that he will also be successful in his negotiations with other countries in the European Community in dealing with cross-border activities in crime and drugs.
My right hon. and learned Friend will reduce the possibility that clever criminals may take advantage of the differences in legal systems of the international community to pursue their criminal enterprises. He will increase the chance that, with international co-operation, there will be no place for the criminal to go free from the fear of prosecution and punishment. I know that that is so, because that is almost a direct paraphrase of a speech that my right hon. and learned Friend made in December 1989.
I want finally to relate to my right hon. and learned Friend the observation of an international drug baron, who asked his barrister recently what sentence he was likely to receive and how much money would be confiscated from him. When he was told that he was lucky not to have been caught in Malaysia, in Singapore or in Taiwan, where anyone flying into the country will see in the document handed to him on the plane that the penalty for drug trafficking is death, he said:
Ah, but I would not have trafficked here in Britain if there had been the death penalty.
There must be a moral in that story.

Mr. Stuart Randall: In my brief comments tonight, I want to begin by saying that, as my hon. Friend the Member for Huddersfield (Mr. Sheerman) has already said, we support the Bill. We support it because of its broad aims. First, it will ratify in legislation the conventions in the fight against international crime, which have been referred to today. Secondly, the Bill will facilitate co-operation between nations. Over the years, crime has become more international, so it must be important that our institutions adjust their way of operation to help to combat international crime. Clearly, international co-operation is vital.
I can sense that we are achieving co-operation on the Bill this evening between Her Majesty's Opposition and Her Majesty's Government. Although there is a feeling of co-operation, I want to suggest constructively that the Opposition are very worried about the question of money laundering. As we are all co-operating here this evening, and as there is international co-operation, I hope that the Minister will let us know specifically what the Government intend to do about money laundering and what discussions the Government have had with the banking industry nationally and internationally, and with the Bank of England. What are the attitudes on the issue?
The reason why money laundering is so important is that drug trafficking and other aspects of international crime are very lucrative. Drug traffickers tend to be very greedy people who make huge sums. The people who make most money out of drugs are those who move the products and the money around the world. We need international co-operation to improve tracing and seizure. The problem

lies in the way that money is moved around the world, and the banks themselves have terrific difficulty in establishing what money has been moved to whom. The audit trail is difficult and complex.
I welcome the valuable contribution of the Chairman of the Home Affairs Committee. Particularly welcome to me, and, I am sure, to the Minister of State, was the statement on the way in which the Bank of England had been asked to look into the whole question of money laundering and to see how the banking industry, both nationally and internationally, could make a contribution in this field. I understand that, so far, the banks have not made a statement and that the Government have not yet responded.
As there is such co-operation today on this very important issue, I am convinced that the Minister will tell us clearly what the Government's policy is on laundering and what specific steps we can expect the Bank of England to be encouraged to take, as well as what specific action will be needed internationally. No doubt the Minister of State will tell us, in particular, whether he feels that there are any parts of this Bill that need to be enhanced or strengthened following the discussions that I am sure he and the Home Secretary have had with the banking industry.
This matter has been dealt with today in a very constructive and co-operative manner. I hope that the Minister will make quite clear to the country;—indeed, to the world, because this is an international problem—the outcome of discussions with the banking industry, particularly the Bank of England, and what is happening with regard to the possible withdrawal of licences from banks that fail to co-operate or are found to be operating in the money-laundering business.
I shall now conclude, anticipating from the Minister of State an answer on this important issue of money laundering. Perhaps there are some sensitivities, but to the Opposition—in particular, I congratulate my hon. Friend the Member for Huddersfield on his excellent speech—it is such an important issue that something must be done to combat it. We believe that money laundering affects adversely the efforts not only of the British Government but also of other Governments to rid the world of the evil of drug-taking.

The Minister of State, Home Office (Mr. John Patten):: I cannot recall ever having followed a winding-up speech as charming as the one that has just been made. I became extremely worried—the speech was highly persuasive. The hon. Member for Kingston upon Hull, West (Mr. Randall) reminded me very much of Shere Khan in "The Jungle Book". He seemed to be saying, "Trust in me, trust in me. Just give me the information. Just give me the answers."
Over recent years, I have watched the hon. Gentleman with respect, and I think that, like his hon. Friend the Member for Huddersfield (Mr. Sheerman), he really meant the support that, on behalf of the Opposition, he expressed for this Bill. My right hon. and learned Friend the Home Secretary and I both welcome the Opposition's support for the general purposes of the Bill, and I am sure that we shall have some interesting and important discussions in the Standing Committee.
I am sure that, just as we agree on the general principles of the Bill, we can agree also, in another rare moment of bipartisanship, how appalling it is that no Social and Liberal Democrat Member has been present during the debate. It is an utter disgrace.
Many hon. Members raised the question of international co-operation in dealing with banking problems in this context. If our international partners make no distinction between fiscal offences and other kinds of crime, it would not really make sense for us to impose such a distinction and to deny our international partners any help in connection with fiscal offences, while being willing to grant such help in all other cases. If we co-operate with other countries, if we give them the broadest possible support in dealing with offences against their laws, we can expect them to support us when we seek their help in dealing with crimes, within our jurisdiction or abroad, against our laws.
I know that a number of hon. Members, like the hon. Member for Huddersfield and my hon. Friends the Members for Wanstead and Woodford (Mr. Arbuthnot) and for Birmingham, Hall Green (Mr. Hargreaves), are very concerned about whether we should help to enforce other countries' tax laws and about how the Bill adds to what can be done already via double-taxation measures. The hon. Member for Huddersfield and others have voiced the fear that, in helping other countries in respect of fiscal and taxation matters, we might be inadvertently sending someone back to justice that falls below British standards.
The existing extensive network of double taxation treaties, which now includes all our European partners and nearly all other countries in Europe, already provides a mechanism for the exchange of information between tax authorities, but information obtained in this way may well not be admissible in court if someone is eventually prosecuted for a tax offence. This Bill provides a means of obtaining such evidence in a way that is much more likely to make it admissible. I do not see how anyone could reasonably object to filling so obvious a gap in our law. However, we shall pursue the point in Standing Committee if it is raised there.
The hon. Member for Huddersfield made a point about how what might be called a banana republic might make malicious use of a provision of this Bill against a British commercial interest or against a foreign national. That point is worthy of consideration, and it can be considered by the Standing Committee.
I shall not fall into the trap of debating Committee points at this stage, but I should like to draw the attention of the hon. Member for Huddersfield to clause 4(2), which provides very broad discretion as to whether we should be able to respond to requests from overseas. We shall be able to exercise this discretion in dealing with requests from other than European convention countries or from those to whom we have treaty obligations.
If we were to receive from another country a request about whose origins we had some doubt, or its bona fides, if we suspected that there was likely to be abuse of the judicial process in that country, it would be open to us to refuse to nominate a court to take the evidence requested. I think that that deals with the matter, and I hope that it will save time in Committee, when, I suspect, deliberations will get shorter and shorter as we begin to consider the

relatively small number of problems posed by the Bill. By "problems" I mean the point raised by the hon. Member for Huddersfield and other matters, including the one raised by the hon. Member for Greenock and Port Glasgow (Dr. Godman), to which I shall turn in a moment.
The hon. Member for Huddersfield made a great show of being bipartisan, of saying that we were all in this together. However, he allowed the mask to slip, and was inclined to lash out from time to time. I think that, in particular, he was unfair to my right hon. Friend the Foreign and Commonwealth Secretary—especially in criticising my right hon. Friend's record in trying to deal with international co-operation and money laundering. It is a record of which the whole Government can be proud.
The hon. Gentleman was also very unfair to the Home Affairs Select Committee when he used that Committee's admirable report, which was published in November, as ammunition for his arguments about money laundering in this country.

Mr. Sheerman: Will the right hon. Gentleman give way?

Mr. Patten: If the hon. Gentleman allows me to develop the argument I shall, of course, give way. His fox was shot very quickly and splendidly by my hon. Friend the Member for Westminster, North (Sir J. Wheeler), who said that the money-laundering problems isolated in the Select Committee's report were founded not on a lack of co-operation between the banks themselves, or on a lack of co-operation between the banks and the investigative authorities, but on the very complexities of trying to track sums of money as they moved around the globe. My hon. Friend will no doubt correct me if I am wrong, but I think that I use his words more or less exactly.
In such circumstances, the problems lie in identifying the ultimate owner of the money. I do not believe that the hon. Member for Huddersfield was quite accurate in his use of the report of the Home Affairs Committee.

Mr. Sheerman: Will the Minister give way?

Mr. Patten: I thought that I had dealt adequately with the hon. Gentleman's arguments but he wants a second barrel.

Mr. Sheerman: The Minister knows that we are the Opposition and that, even in the most harmonious debate, it is incumbent on us to advance arguments in opposition. I argued that, as the Select Committee pointed out, £15 million seems very small when set against the sum of £1,800 million. That was not a criticism of the Select Committee; indeed, my hon. Friend the Member for Bassetlaw (Mr. Ashton), who is a member of the Select Committee, intervened in support of my argument. We are merely saying that the Bank of England, after consultation with the other banks, must be able to come up with a way of doing more, more quickly. That was our point, and we believe that that should be done soon.

Mr. Patten: The Bank of England can defend itself admirably, but the criticisms of the banking system made by the hon. Members for Huddersfield and for Kingston upon Hull, West were a little unfair in view of the considerable efforts that the banks are already making to deal with precisely that problem.

Mr. Randall: rose——

Mr. Patten: Let me just answer one point raised by the hon. Member for Huddersfield. My officials and those at the Treasury—I see that my hon. Friend the Economic Secretary to the Treasury is here—as well as officials from Customs and Excise and other departments, are in regular contact with the Bank of England on the subject of drug trafficking and money laundering. Let me give an example. The Bank of England has been part of the United Kingdom delegation to the financial action task force set up by the economic summit to consider fresh initiatives in the fight against drug trafficking. There is no question of the Bank of England not playing an active part.
I come now to——

Mr. Sheerman: Before the Minister does that——

Mr. Patten: In that case, I had better give way to the hon. Member for Kingston upon Hull, West, who rose some moments ago.

Mr. Sheerman: This concerns the specific point that the Minister was attempting to answer. Will he take away with him the transcript of the BBC's investigative programme? I know that he does not care much for the BBC, but will he show it to his right hon. and learned Friend the Home Secretary and discuss with him the serious allegation to the effect that the Government are not pushing the banking system far enough or fast enough? I should be much happier if he answered those serious allegations.

Mr. Patten: I can give the House the undertaking now that I shall look at any document that the hon. Member for Huddersfield chooses to send me, but he must not attribute to me views that I have never expressed publicly or privately about the BBC or any other broadcasting organisation. That is simply not fair of the hon. Gentleman.

Mr. Randall: Will the Minister give way?

Mr. Patten: Yes. Now the hon. Member for Kingston upon Hull, West gets his chance.

Mr. Randall: May I put the record straight? The Minister will find from the report of our debate that I made no criticism of the banks. At one time, I was in banking myself and I know banking reasonably well—at least in a specialised area. What I said was that the Opposition believed that the Government could be doing more to ease the banks in a certain direction. The Minister has not told us anything. He said that discussions had taken place, but he did not say what initiatives the Government had taken to ease the banks forward to co-operate internationally to solve the problem that he so eloquently described. We are waiting to hear.

Mr. Patten: Each time I give way to the hon. Gentleman, I learn more about his fascinating career. A couple of weeks ago, in a Standing Committee on Statutory Instruments, I learned that he spent his early days as an engineering apprentice. I now learn of his expertise in banking.

Mr. Lawrence: He changes his job often.

Mr. Patten: As my hon. and learned Friend says, the hon. Gentleman changes his job often; I dare say that he will do so shortly after the next general election.

Mr. Randall: Oh!

Mr. Patten: My right hon. and learned Friend's response to the Home Affairs Committee will, of course, include observations concerning the matters referred to by the hon. Member for Kingston upon Hull, West. He will not have to wait very long.

Mr. Randall: Why not now?

Mr. Patten: Because my right hon. and learned Friend is following the well-precedented conventions of the House, and replying properly and in the normal way to the Home Affairs Committee's recommendations. The hon. Member for Kingston upon Hull, West is getting into a terrible muddle: he referred to a number of detailed matters raised in the Home Affairs Committee's report and not to questions arising from the Bill.
My hon. Friend the Member for Warrington, South (Mr. Butler), on the other hand, did indeed refer to detailed questions raised by the Bill, and I thank him for his remarks. He was especially concerned about precursor chemicals, which are a tricky problem. The convention provides a mechanism whereby new chemicals can be added or other chemicals deleted or transferred from one table to another, and that is by resolution of the United Nations Commission on Narcotic Drugs.
I ask my hon. Friend to glance at clause 12, which provides a corresponding power for the schedule to the Bill to be amended so that we can introduce new precursor drugs rapidly should the need arise. I hope that hon. Members on both sides of the House will accept that rapid mechanism.

Mr. Butler: Why is it necessary, for the purposes of clause 12, to specify drugs?

Mr. Patten: Because there is a wide range of chemicals that can be used. New chemicals are being introduced all the time and it is necessary to have the power to place them on the list. Let us take the example of the chemicals that might be used in the manufacture of cocaine. Some of the chemicals needed are commonly used. Acetone, for example, can be used as a reagent and a solvent. Those chemicals have a wide licit—I hope that the Hansard reporter is listening—use in many manufacturing processes and therefore to include a general blanket definition would be to use a very big-bore gun.

Mr. Lawrence: My right hon. Friend should be aware that my hon. Friend the Member for Warrington, South (Mr. Butler) is not alone in suggesting that such a provision may not be unnecessary. There is already a requirement in the clause that we should know or suspect that the substance is to be used for unlawful production of a controlled drug. Add to that the fact that there is a whole list of chemicals, such as acetone, which will not necessarily be used for the manufacture of a drug and one cannot but ask what on earth is the point in having a scheduled list which may end up excluding rather than including the very chemicals that one seeks to catch. I do not expect my right hon. Friend to give an answer immediately, but will he consider the matter in due course?

Mr. Patten: I do not know whether my hon. and learned Friend the Member for Burton (Mr. Lawrence) wants to serve on the Standing Committee, but I suspect: that my hon. Friend the Member for Warrington, South has earned his ticket and that we shall have some debates on this in Committee.
The hon. Member for Huddersfield said that we were not doing enough at home or abroad. Let me give one example of what we are doing abroad. The United Kingdom is the fourth largest donor in the world to the United Nations fund for drug abuse control, and that is not a bad record. The total United Kingdom aid in the current financial year is more than £7 million, which includes £4 million that is to go to Colombia, where it will be very well used. The conference to be held in April under the chairmanship of my right hon. and learned Friend the Home Secretary will do a great deal to devlop the global approach to tackling the cocaine problem in south America in particular.
In criticising our efforts at home, the hon. Member for Huddersfield was unfair to overlook the considerable budgetary provision that we make annually to try to solve the drug problem. On education, for example, some £3 million has been provided for drug prevention campaigns, some £9 million has been spent in the last four years for education campaigns in schools and a substantial sum of between £3 million and £4 million has been provided for in-service teacher training to prevent drug abuse in schools. That is terribly important in persuading children to resist the offer of a drug.
There is also my right hon. and learned Friend the Home Secretary's drug prevention initiative, which is to be area-based. He has announced that it will happen in at least nine of our cities where the drug problem is particularly bad, beginning in 1990–91. The Department of Health has earmarked some £14·5 million for drug treatment services in the current year. That is a substantial and growing amount. When we tot up all those heads of expenditure alone, they come to about £30 million.

Mr. Sheerman: I know that the right hon. Gentleman is a geographer, not a mathematician, but could we have that figure expressed as a percentage of the £1,800 million which his officials reckon is made out of drugs at present in this country? I have not worked it out—I am not a mathematician either—but it sounds like a small percentage.

Mr. Patten: We all know that it is easy for people to talk about the need to spend public money. It is important to spend public money properly, and I suggest that all the money being spent by various Government Departments—I thought that we had the Opposition's support for that—is being exceptionally well spent.
The hon. Member for Huddersfield tried the Home Secretary's patience earlier by continually saying that he would bring forward new policies but never saying what they would be. Here he goes again, saying that he wants to spend more. Does he wish to give a pledge now? My hon. Friend the Economic Secretary is here with his little calculator. He would love to add such a pledge to previous Labour pledges. The trouble is that the Labour party will not say what they intend to do or how much they intend to spend.

Mr. Sheerman: rose——

Mr. Patten: I shall not give way to the hon. Gentleman again.

Sir John Wheeler: I intervene as I reflect on what my right hon. Friend has just said. Does he agree that the £18

billion referred to in the Home Affairs Select Committee report is the estimated amount of money which moves through the international banking system, which happens to be based here in London? Does he agree that it is not money that is identifiable in the sense that we can send vanloads of police to seize it tomorrow but money that is believed to move through the system because London happens to be the premier banking location in the world?

Mr. Patten: My hon. Friend is right. That is yet another example of how the hon. Member for Huddersfield simply misquoted the Home Affairs Select Committee report. The report is available in the Library of the House and the words are on the page.

Mr. Sheerman: On a point of order, Mr. Deputy Speaker. I reluctantly take issue with the Chairman of the Select Committee. He misleads the House—I am sure because he has a lapse of memory. The report says:
The National Drugs Intelligence Co-ordinator estimated that there is at least £1,800 million"—
not billion—
derived from drug trafficking in the United Kingdom.

Mr. Deputy Speaker (Sir Paul Dean): That is an intervention, not a point of order.

Mr. Patten: The hon. Member for Greenock and Port Glasgow (Dr. Godman) talked himself pretty satisfactorily on to the Standing Committee. He asked several detailed questions about Scottish provisions, the definition of a ship and whether British customs or other vessels in hot pursuit can board boats in international waters. I look forward to debating all those points in Standing Committee, but I should surely be out of order if I debated them in detail on Second Reading.

Dr. Godman: Will the Minister give way?

Mr. Patten: If the hon. Gentleman will forgive, I must make some progress. I have given way more than all those who have spoken put together.
I shall end my speech by referring to the speeches made by my hon. Friend the Member for Westminster, North and my hon. and learned Friend the Member for Burton. My hon. Friend the Member for Westminster, North was right when he urged us again and again that there must be no legalisation of any presently illegal drugs. We agree with him entirely. I congratulate him and his Committee on its excellent report, to which, as I said earlier, we shall reply as soon as possible.
I thank my right hon. and learned Friend the Member for Burton for his support for our tightening up of confiscation orders. I know that, with his wide experience at the criminal bar and sitting as a recorder, he recognises the need to tighten up the confiscation legislation. Perhaps we should have recognised it in earlier legislation. He also referred to the need for greater international co-operation.
I welcome the bipartisan approach of the Labour Front-Bench spokesmen and congratulate both the hon. Member for Huddersfield and the hon. Member for Kingston upon Hull, West on their excellent speeches. I look forward to the Committee stage. However, the point was made forcefully by my hon. Friend the Member for Westminster, North and my hon. and learned Friend the Member for Burton that we are debating an issue which affects all our children—the fight against drugs.
Time after time, my right hon. and learned Friend the Home Secretary rose to press the hon. Member for


Huddersfield, who was making generalised statements about future Labour policy, to give greater detail. Understandably, the hon. Gentleman could not give an answer. I do not criticise him for that, because the person who should have been here this afternoon to debate this extremely important issue is the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). There is nothing more vital for our children's future than prevention of drug abuse. Where was the self-styled shadow Home Secretary? He was not here this afternoon.
The only thought-provoking remark made by any Opposition Member about how a Labour party policy might develop in future was made by the hon. Member for Bassetlaw (Mr. Ashton), who is no longer in his place. He has been described in my hearing as a thinking man's Roy Hattersley. He at least came up with a positive suggestion, which was grasped with both hands by the hon. Member for Huddersfield as the nearest thing to a proper Labour policy on drug abuse that he could find. He then compounded his failure by intervening—which I thought was impertinent—in the speech by my hon. Friend the Member for Westminster, North to say that the right hon. Member for Sparkbrook had more important things to do than attend the debate this afternoon, because he was deputy leader of the Labour party. The right hon. Gentleman was putting his political duties before his duties to the House.
Labour Members bellow brazenly with criticism, but they are shy of telling us their policies. I shall do my best during the Standing Committee proceedings, if the Bill receives a Second Reading, to tease out those policies. We shall return to Labour's policies——

Mr. Lawrence: And how much they cost.

Mr. Patten: As my hon. and learned Friend says, and how much they cost. Having said that, I thank the Labour Front Bench spokesmen for supporting the Bill and I sit down in the sure and certain knowledge that they will not force it to a Division.

Question put and agreed to.

Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

Orders of the Day — CRIMINAL JUSTICE (INTERNATIONAL CO-OPERATION) BILL [Lords] [Money]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act resulting from the Criminal Justice (International Co-operation) Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of any expenses incurred by the Secretary of State under that Act.—[Mr. John Patten.]

Orders of the Day — European Community (Fraud)

[Relevant document: un-numbered Explanatory Memorandum submitted by Her Majesty's Treasury on 4th December 1989 on anti-fraud policy: Commission work programme.]

The Economic Secretary to the Treasury (Mr. Richard Ryder): I beg to move,
That this House takes note of the Annual Report of the Court of Auditors of the European Communities for 1988 and European Community Document No. 4582/90 relating to action against fraud; and approves the Government's efforts to press for value for money from Community expenditure.
The two reports referred to in the motion will be discussed at ECOFIN on 12 March. I hope that the debate will help to show the Commission, and our partners, that the Government have the full backing of the House as we spearhead efforts to get to grips with fraud. It may be helpful to remind the House of the backcloth to the two reports.
The Commission's report on action against fraud stems in no small part from a growing anxiety here in Britain. This House has shown a major interest in the subject, on which we have held valuable debates. My hon. Friend the Member for Southend, East (Mr. Taylor), the hon. Member for Newham, South (Mr. Spearing) and my hon. Friends the Members for Holland with Boston (Sir R. Body) and for Stafford (Mr. Cash) have shown a particular interest in the subject. The House of Lords Select Committee on the European Communities published an excellent report on "Fraud Against the Community" in February 1989 and the Government's political determination to tackle fraud has never been in doubt. We have, with the full support of the House, striven to put fraud higher on the agendas of Brussels.
The British Government have ensured a higher profile for fraud in ECOFIN and other Councils of Ministers, and we will keep up our pressure to turn good intentions into concrete changes for safeguarding public money. The annual ECOFIN debate of the Court of Auditors report began in 1985, largely at United Kingdom instigation. The present initiative against fraud was launched by ECOFIN in March 1989, and followed discussion of a United Kingdom paper.
Our recommendations, accepted by the Commission, included revision of arrangements for monitoring and surveillance of common agricultural policy transactions involving the payment of export refunds to traders, adjustments to improve the monitoring of systems for storing agricultural products which have been taken into intervention, better scrutiny of the accounts of firms and traders which receive payments under CAP, simplification of Community legislation in relevant areas, and a review of the supervisory arrangements which member states were required to introduce in the regulations governing the expanded structural funds.
Those recommendations were reinforced at a meeting of the Commission's committee on fraud prevention, known as UCLAF, in May when another United Kingdom paper examined this work and suggested further work for the future. It emphasised the need for a long-term programme of action and laid particular stress on the need to improve systems for combating fraud. We advocated


regular and comprehensive examination of control systems consistent with firm financial management control.
At our instigation, fraud featured both at ECOFIN and at the European Council at Madrid in June. ECOFIN welcomed the Commission's programme of work on fraud, called for early action on export refunds and intervention storage and asked all member states to instruct their ministerial colleagues to intensify the fight against fraud. The European Council in Madrid emphasised the need for firm action, welcomed the work programme and instructed the Council of Ministers to decide quickly on proposals from the Commission to combat fraud.
Britain has always been in the vanguard in the fight against fraud. The discussions and decisions that I have outlined owed a great deal to our political will and to the importance that we and the entire House attach to it. Sadly, the available figures do not suggest that all other member states take the problem as seriously as Britain does. We reported 163 cases of CAP fraud to the Commission in the first three quarters of 1989, whereas Greece and Portugal reported none. Regrettably, reporting standards differ between member states which makes comparisons difficult.

Dame Elaine Kellett-Bowman: Does my hon. Friend agree that the maddening aspect of this is that, because we track down fraud assiduously and come up with figures, other people think that we are worse than they are, which is most misleading and unfair when we have far less fraud and are much more careful about it?

Mr. Ryder: My hon. Friend draws attention to an important point which she raised in the recent agriculture debate. We certainly believe that Britain is as assiduous as any other European Community country in identifying and reporting fraud.

Dr. Norman A. Godman: Is the Minister satisfied that Community fisheries policy funds can no longer be siphoned off by unscrupulous fishing interests in certain European Community littoral states?

Mr. Ryder: Fraud is such a complex issue that one can never be certain about anything when it comes to some of the ways in which people in Europe can commit fraud. The British Government, the Commission and most of our partners in the European Community have done everything possible to get to grips with this issue, especially in the past year and principally as a result of the pressure that we brought to bear in Brussels and at other Council meetings in Europe—notably the Council to which I have already referred, which met last June in Madrid. I leave it to hon. Members to draw their own conclusions from the figures that I have given, which show that our reporting of fraud seems to be far more accurate than that of some other countries.
I wish to highlight four areas in which concrete progress has been made. First, a new export refund monitoring regulation toughens up existing arrangements by requiring customs officers in all member states to inspect in person a minimum proportion of items on which export refunds are claimed. The proportion will rise to 5 per cent. by 1992.

This measure is a direct response to last year's Court of Auditors report which catalogued numerous examples of frauds relating to export refunds. In a sample of 95 export consignments examined by the court in one member state, only one had been subject to random examination; and that was fraudulent.

Mr. Ron Leighton: Does the Minister agree that that is shocking, and that if a private company was involved in that amount of fraud it would soon be up in court and prevented from continuing to trade?

Dame Elaine Kellett-Bowman: That is why we are dealing with this.

Mr. Ryder: As my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) observes from a sedentary position, that is precisely why we are dealing with this matter. As I have said, the British Government have been in the vanguard and have spearheaded the efforts of the European Community to get to grips with the problem. I only wish that others in Europe took the issue as seriously as we do. A considerable amount of the progress in the past 12 months has been made as a result of the efforts undertaken by Ministers in many Council meetings in Brussels. We have also received the support and approval of the Commission.
Secondly, in its report last year the Court of Auditors said that existing documentation for export refund purposes did not provide sufficient proof that cargoes had arrived at their stated destination. The court cited the discovery in one case that two major export refund traders in different member states owned complete sets of customs stamps of the main countries with which they traded. This illustrated the danger of relying on the documentation in question—the so-called annex 2 documents—which bears no greater proof of arrival than a customs stamp. This document has now been abolished and replaced with a more secure system. Incidentally, the United Kingdom is one of only two member states that have given the Commission wholehearted support in this matter.
Thirdly, a new code of conduct defines the basis on which member states are obliged to report all significant frauds and irregularities in respect of structural fund receipts. The code specifies the information to be provided by national authorities, including information on the state of legal proceedings, and the timetable for returns.
The last of my four points concerns tougher regulations relating to the payment of own resources. For example, regulation 1552/89 requires member states to report all funds and irregularities involving more than £7,000 of own resources and empowers the Commission to carry out on-the-spot inspections at traders' premises and customs offices in member states.
Attempts have also been made to simplify the tests applied to determine whether a payment is justified. This makes sense for everyone involved in a transaction—the person claiming the payment and the organisation, such as a Ministry of Agriculture, deciding whether the payment is justified. In some areas, notably agriculture, the requirements were becoming difficult to apply, as well as being increasingly difficult to audit. A good example of what has been achieved is the scheme for export refunds of beef and veal where the number of product classifications has been reduced by more than a third and the number of frozen meat refund rates has been cut by half. That will


reduce the scope for fraud based on bogus declarations of the quality of exported meat and its destination. While recognising that sensible simplification of complex rules should he supported, we shall not fall into the trap of agreeing rules which diminish our chances of preventing fraud.

Dame Elaine Kellett-Bowman: Does my hon. Friend agree that we would stand a much better chance if people from other countries inspected each other's things? An inter-EEC inspectorate, in which we do not have to adjudicate on our goods and the Dutch do not have to adjudicate on theirs, would be better because people are by nature more reluctant to identify fraud in their own country because it redounds badly on their country. Does my hon. Friend not agree that interchangeable inspectorates would be much more likely to sus out what was going on, so long as they all worked alongside one another?

Mr. Ryder: We have been making broad progress in that direction. When this subject was debated in the House a year ago, only 10 people were employed in the Serious Fraud Office in Brussels—now the number is 30. The office also has considerable powers along the lines that my hon. Friend the Member for Lancaster would like. As time goes on we shall move further in the direction in which she wants the House and the Community to go.

Mr. Anthony Beaumont-Dark: (Birmingham, Selly Oak): In countries such as Britain, which has a national Parliament, if someone engages in fraud he or she is taken to court and faces severe penalities. That is right—otherwise, fraud would prosper. What penalties have been imposed on people who have engaged in fraud abroad? Is it not true that all that happens is that one loses the payment for which one fraudulently claims? If that is the only penalty, would it not be worth having a try?

Mr. Ryder: I am not sure whether my hon. Friend would ever do that. I shall refer directly to my hon. Friend's point about prosecutions later in my remarks.

Mr. Christopher Gill: rose——

Mr. Ryder: I must make progress. I have given way several times already, but shall give way for the last time to my hon. Friend.

Mr. Gill: Before my hon. Friend moves on to another subject will he consider that with beef—a product that he mentioned—the inspectorate will find it difficult to discern whether fraud has taken place. The way in which the commodity is handled, stored and generally presented defies expert identification. Even people who have spent a lifetime in the industry would be hard put to tell whether the commodity that is labelled as being in the box is actually contained in it, and whether it is a certain cut of beef or not. The only way in which my hon. Friend will ever solve the problem of fraud in that sphere is to do away with the whole system. No amount of inspectors and extra cash thrown at the problem will eliminate it because it defies even the experts.

Mr. Ryder: I know that my hon. Friend speaks with a deep knowledge of the subject. I believe that he has been in the industry all his life.

Mr. Ian Taylor: It has made him a vegetarian.

Mr. Ryder: My hon. Friend whispers from a sedentary position that it has made my hon. Friend the Member for Ludlow (Mr. Gill) become a vegetarian.
I was beginning to have some sympathy with the point made by my hon. Friend the Member of Ludlow until to his conclusion. If he believes that there are ways in which the system can be improved in line with what we have been doing during the past 12 months, I shall be happy not only to receive his advice but to consider it before the ECOFIN meeting in mid-March, which will be attended by my hon. Friend the Financial Secretary to the Treasury.
Before we can assess the effectiveness of measures against fraud we need better information about the scale, nature and incidence of fraud, especially from some of our partners. Nevertheless, it is clear that there is widespread recognition of the problem of fraud in Europe. The Commission's report on fraud includes two significant examples. The first is a list of 132 irregularities in agriculture, totalling about £39 million. I do not for one moment believe that that represents more than the tip of the iceberg. The second example involves a legally significant Greek fraud, where maize imported from Yugoslavia was re-exported under a Greek label and payment of the agricultural levy thereby evaded. The respective powers of the member states and of the Commission are being examined as a result of the ruling by the European Court of Justice on the case which followed the exposure of that fraud.
The Commissions regard the European Court of Justice's judgment as reaffirming the power of the Commission to impose administrative sanctions to ensure compliance with Community law and the obligation on member states to take effective action to penalise fraud affecting the Community budget in the same way as fraud affecting their national budgets. We believe that the Commission's position on administrative sanctions is right and we are disappointed that some other countries do not share that view.
We support the imposition of administrative penalties, provided that the penalties are automatic and In proportion to the scale of error involved and that the arrangements do not involve any form of judicial process. An attempt to distinguish between genuine mistakes and deliberate attempts to defraud should not be undertaken by the Commission as that would be an unacceptable intrusion into role of the judiciary. The Commission may publish a regulation setting out its view. That is unnecessary, but we will support it if it is the only way 10 improve financial discipline.
We agree with the general direction of the Commission's programme of work on fraud for 1990, but we want to see a clear timetable, with dates for completion of the work. We want concrete evidence of improvements in the reporting of fraud and in the controls carried out by member states and resolution of the question of administrative penalties in agriculture. We also want early introduction of a binding code of conduct for the structural funds.
With regard to legislation, we shall maintain pressure on the Council to react to Commission proposals quickly. Indeed, the European Council underlined the need for swift action last year in Madrid.
I have set out the background to and some of the main themes of the Commission's report, "The Fight Against


Fraud". Thanks in no small part to our efforts, progress was made in 1989, but British pressure will be maintained at all levels and within every Department.
With regard to the Court of Auditors report, I appreciate the court's thoroughness and professionalism in preparing the report, which highlights ways in which policies can be improved and control systems tightened up. The court comments on the clearance of accounts—the procedure whereby the Commission checks the reliability of member states' annual declarations of expenditure on agricultural support. It also decides the amounts charged against the budget. The Commission disallows expenditure when payments have not been made in accordance with the scheme's rules. Expenditure which is not recognised is disallowed. It then has to be repaid to the Community.
The principle of disallowance is central to the control of Community funds. The Commission has drawn the attention of member states to the fact that proper checks are not being carried out on Community expenditure. France faced disallowances—in effect a penalty of £80 million—for inadequate control over payments of livestock premiums in 1986 and 1987. The United Kingdom was penalised by £3·3 million in 1987 for late collection of clawback debts and poor controls over the reliability of traders' export declarations.
The Court of Auditors criticises the slow introduction of proper audit systems and recommends that the Commission look at the resources required to carry out this task effectively, and we agree. On the structural funds, the Court of Auditors raises questions about additionality and transport infrastructure. The United Kingdom strongly supports the court's work, but in neither of those areas do we agree with what is said about the United Kingdom.
On additionality, the court alleges that expenditure is not being devoted to the projects intended and that expenditure from the Community budget should not simply replace national expenditure. We rebut those allegations. Every ecu that we get from the funds goes to the programme or project for which it is intended. Public spending plans are set after taking account of likely levels of receipts from the Community budget. Those receipts enable public spending in the United Kingdom to fund more projects than would otherwise have been the case.
The court also names the United Kingdom as one of the member states in which transport infrastructure moneys have merely subsidised projects which would have——

It being Seven o'clock, and there being Private Business set down by direction of THE CHAIRMAN OF WAYS AND MEANS under Standing Order No. 16 (Time for taking Private Business), further proceeding stood postponed.

Orders of the Day — Redbridge London Borough Council Bill (By Order)

Order read for resuming adjourned debate on amendment proposed [1 February] on consideration of the Bill, as amended.

Clause 3

ESTABLISHMENT OF MARKET

Which amendment was: in page 2, leave out lines 17 and 18 and insert:
'(2) A market established under this section may be held on such days of the week as the Council may determine, including Sunday.'.

Question again proposed, That the amendment be made.

Mr. Deputy Speaker (Sir Paul Dean): I remind the House that we are also discussing the following amendments: No. 3, in page 2, line 18, at end insert
'save that the market shall not be held on more than two days a week'.

No. 4, in page 2, line 18, at end insert
'save that the market shall not be held on more than one day a week'.

7 pm

Mr. Robin Squire: It is nice to see you in the Chair again, Mr. Deputy Speaker—I am thinking back to the time when we last debated this matter a couple of weeks ago—although I am not sure that you would extend the same welcome to me. Hon. Members who were present when the debate was interrupted then will not need me to remind them where we had reached in relation to this group of amendments. In fairness to hon. Members who were not present, I will give a brief resume of what we are discussing, or new arrivals may find the issues complex.
The essential aspect of the amendments is the number of days on which the proposed Ilford market may open. In that context, several options are before the House, including the option to open on Sunday and various restrictions on the number of days per week, to which I shall refer in detail.
The wider issue at the heart of the Bill is whether it is fair and proper for the private Bill procedure to be used to cancel rights enjoyed by royal writ for over 700 years, when successive Governments have chosen not to do so. We have discussed that matter and it would not be in order for me to talk about it at length now. It is important for hon. Members coming new to the discussion to be aware of what is involved and, in particular, to remember that 284 hon. Members have in their constituencies equivalent charter markets, each of which could be affected by Bills such as this. That is why the National Market Traders Federation remains strongly opposed to it.
Since I last addressed the House on this subject my council has written to me again making some points that it believes were not properly made last time. They are germane to the question of how many days the market should open because that, in turn, goes to the heart of the profitability of the proposed Ilford market and, from my point of view, that of the existing Romford market.
My hon. Friend the Member for Romford (Mr. Neubert), the Parliamentary Under-Secretary of State for Defence Procurement, is unable, as on previous occasions,


to contribute to our proceedings. He must sit in frustration listening to my second-hand attempts to put across the case that he would make.
The first point that was made to me—this is relevant to how often the market trades—is the need to clarify once and for all the number of traders involved in Romford. The number of traders occupying pitches in a full market would be nearer 300 than 600. The hon. Member for Normanton (Mr. O'Brien), who is on the Opposition Front Bench, will recall that we discussed that point at length two weeks ago. Havering council, which covers Romford, makes the point that many of the existing stalls cover two or even three spaces, and that is why the figure is nearer 300 than 600, with a percentage set aside for casual traders.

Mr. William O'Brien: Does the hon. Gentleman accept that there is no queue for stalls at Romford market? Traders are not queueing up to take part in the market, so one must ask whether there is any need for additional resources in the area.

Mr. Squire: The hon. Gentleman makes a fair point which the promoters of the Bill will wish to take on board. I accept that 5 per cent. of the spaces are reserved for casual traders, who turn up when they wish to and who are not regular traders.
There was much discussion about the distance of six and two thirds miles and it was suggested, rightly, that that was an arcane form of measurement. My hon. Friend the Member for Ilford, North (Mr. Bendall) asked why the Food Act 1984 did not provide the same protection. That measure left intact the rules that a franchise market is protected against any rival within six and two thirds miles. A statutory market is also protected, within six and two thirds miles, from any rival other than a statutory market.
Those are all relevant points when considering how many days the market should be open because the distance within which markets may operate one from another goes to the heart of the profitability of those markets. For all the argument about anachronisms, if the Bill is enacted, the London borough of Redbridge will enjoy protection under the same rules against rival markets established within that borough, and that protection will undoubtedly be relevant to the financial arrangements for the market at Ilford.

Sir Nicholas Bonsor: My hon. Friend might ask those representing Redbridge to say exactly what is the span of the Redbridge area. I suspect that we shall find that its protection extends over a substantial area in terms of square mileage.

Mr. Squire: I suspect that that question is directed to someone else, through me, so it would be wise if I continued speaking rather than looked to an hon. Friend to answer. But I know that my hon. Friends from Redbridge will confirm that parts of Redbridge would be more than the relevant six and two thirds miles from Romford market and, presumably, would be outside the scope of the Bill.
My good and hon. Friend the Member for Ilford, South (Mr. Thorne) said when we previously debated this matter that the compensation was extremely generous. The central difficulty for the London borough of Havering is

how to establish a proper compensation basis, which is part of the issue of taking away long-held rights. How does one measure such matters?
It has always been open to the London borough of Redbridge to ask the London borough of Havering, "Would you grant us not permanent rights but scheduled rights under your powers, so that we may trade and set up all the necessary conditions?" The only time that that was even suggested in the context of the Bill was in the statement, which hon. Members will recognise, "This will happen anyway and, because of that, we would like to discuss it". That is scarcely what might be termed open-ended discussions. Discussions have been promised only in the context of a Bill which would, in the council's eyes, be passed.
It should be remembered, especially in view of the weather now, that we are talking only about the open market, not about the covered market in Romford, which is privately owned and run and is similar, I am told, to the covered market in Ilford. We are talking about a clearly defined open market area.
I stressed that I did not want to talk at length or to quote from letters, and I hope that I have managed not to do so. However, the key point in this group of amendments is whether market trading should be extended to Sundays. When our proceedings were interrupted on the previous occasion, an interesting discussion was getting under way on hon. Members' attitudes to Sunday opening.
A few years ago hon. Members were required to come to a conclusion on Sunday trading and it is not my rode tonight to persuade them, one way or the other, to change their conclusion. However, since then there has been a surge of people wanting local authorities to take action and in some cases of councils, including my own, taking action to close places on Sunday and attracting a lot of public condemnation as a result. The matter is unsatisfactory and most of us, whatever our views about Sunday trading, would welcome clarification of the rules.
I would go a little further. I suspect that Sunday trading is the baby of the Minister of State, Home Office, the hon. and learned Member for Putney (Mr. Mellor), who has many things on his plate at the moment, including working out what we should be watching on our televisions and listening to on our radios. Because of his current workload and what happened when the Government last tried to introduce legislation on Sunday trading, I can understand why he may be reluctant to introduce legislation that would raise the issue again.
But we have an opportunity tonight to show the Government whether we are interested in the reintroduction of such legislation. It would be welcome if 300 or 400 hon. Members were to vote on this group of amendments. It would be even more welcome if they voted overwhelmingly in favour of the line that I took at the time, which was to extend Sunday trading. We should then be showing the Government clearly that a substantial body of hon. Members had seen the inevitable consequences of rejecting legislation a few years ago—that local authorities would be required to prosecute the law with full vigour—and recognised that that was essentially unsatisfactory. This is an unstable position which creates much annoyance among many of my constituents.

Mr. Harry Barnes: Would it be possible for hon. Members to be in favour of the


extension of Sunday trading but opposed to the Sunday trading extension being applied to the market? Much depends on what is happening in Redbridge and the shopkeeping provisions near the market. I do not know whether we know what is likely to be sold in the market or in the areas round the market, and whether the sales within the market would assist sales in the shops or whether they would be in competition with them and cause problems within Redbridge.

Mr. Squire: The hon. Gentleman makes several valid points. He must be right to suggest that one could take a different view on Sunday trading at the market and generally or one could be against both or in favour of both. All that we know about what is to be sold, based on the evidence taken in Committee, to which I shall refer later—I do not want to stretch your tolerance, Mr. Deputy Speaker, by referring to it now—is that a number of things would be prohibited or permitted. But nothing in the Bill as yet would cover that point. This group of amendments would give the House a valuable opportunity to tackle what most people see as an anomaly that will not go away except as a result of future legislation.
This is a narrow Bill on which to vote on Sunday trading, but it would be one of many straws in the wind. Many issues have started in small measures and have subsequently been seen to be major issues in their own right.
The critical point of holding the market on one or two day a week goes to the heart of the Bill. We are discussing a precedent. I am grateful for a short note that I received only this week from Mr. Toller, the general secretary of the National Market Traders Federation. The key paragraph in his letter says:
A point that has not yet been raised is that if this Bill were passed it would form a precedent for anyone, not just a local authority, to sponsor a Private Bill to set up a market"—
on any number of days per week.
I know from experience that both British Rail and London Underground are interested in setting up markets at weekends on station car parks as a way of raising additional revenue, and British Coal, British Steel and British Ports all have spare land that could be used.
I am not trying to make blood-curdling suggestions to hon. Members with markets in their constituencies, but the general drift of the general secretary's fears is clear, and he is a man with experience and knowledge of markets. The only precedent for this Bill is the so called "Bexley Bill" which disappeared suddenly because agreement seems to have been reached. But precedents, once established, are easily quoted. Hon. Members will find that the fears expressed by Mr. Toiler could be realised in their constituencies. They could find similar private Bills, not national legislation that can be voted against on principle, and their worst fears could be realised which would have an impact on many of their constituents and market traders.

Mr. Harry Barnes: From what the hon. Gentleman is saying, we appear to be in a difficulty. Should we judge the best interests of Redbridge and treat this as a separate Bill, or should we consider the consequences that are likely to flow from it?

Mr. Deputy Speaker (Mr. Harold Walker): Order. We must confine ourselves to Redbridge, for good or bad.

Mr. Barnes: The hon. Member for Hornchurch (Mr. Squire) suggested that the Bill had a knock-on effect which, without going into it in detail, would influence the attitudes of hon. Members to the measure. That would presumably add weight to his point that this is not an ideal way in which to deal with legislation.

Mr. Squire: The hon. Gentleman makes the point succinctly and with admirable accuracy. It would be stretching the well-known tolerance of hon. Members to expect them to identify with the specific issue of Romford market or Ilford market, for reasons that need no expansion. I take that point. But my one hope is that I can get across to sufficient hon. Members that we are talking about the way in which the matter has been dealt with, establishing a precedent which can and arguably will be followed by other markets in other parts of the country where councils will seek to set up markets in competition with markets that have been established by royal decree for some 700 years and without any wholesale revision of the law.
I am a reasonable person; I do not think it is yet a crime to plead guilty to that. If we were considering wholesale revision of the law on markets, there would be an opportunity for some to say, "I want the law to remain as it is," and for others to say, "We want a complete free-for-all". But we are not having that. It is unfortunate that the Bill has been presented.
The key point is the number of days per week on which the market may be held. Again, that goes to the heart of the profitability of the market. In previous debates on the measure, we heard that Romford market is open three days a week. As drafted, the Bill proposes six days a week for Redbridge, twice as many as for Romford. That increases the concern of those involved with the existing market. They have no other way of defending their livelihood. How else can they do so except by saying that this is not a reasonable and proper way to proceed?
I have given the reason for the proposed amendments. They are worthy of consideration. In particular, amendment No. 3, which proposes that the market should not be held on more than two days a week, deserves support.

Mr. Michael Colvin: I am participating in the debate because an important point of principle is at stake. I have no particular interest in the markets being discussed by my hon. Friends. I congratulate my hon. Friend the Member for Hornchurch (Mr. Squire) on the way in which he moved the amendment in my absence some days ago.
We are debating the principle of Sunday trading because the precedent that could be set by the Bill—if the House is minded to accept my amendment—could apply to other statutory markets. As we have heard, there are 284 in all. Two are in my constituency, and both would benefit greatly from the introduction of the Sunday trading facility.
We are not trying, through the amendment, to compel any market to trade on Sunday, nor to compel any council or local authority to insist that it does. We are merely saying that the local authority should at least have the enabling power to determine the days upon which a market should trade. If the local authority wishes to


include Sunday, so be it. That is the wish of Parliament, but it will also be the wish of the democratically elected local authority.
We have heard a great deal recently about accountability in local government. No doubt with the introduction of the community charge such accountability will grow. Many of us very much hope that it will. If a local authority decides, therefore, that rather than being compelled to enforce the law on Sunday trading—in other words, to take Sunday traders to court for having broken the law of the land—it should enable those traders to trade on a Sunday, that would be to the benefit of everyone.

Mr. O'Brien: I wish to draw the hon. Gentleman's attention to the evidence given in Committee. The local authority—on this occasion, Redbridge—stated categorically that it would not wish to operate the market on a Sunday. That was a decision taken by the council. Why is the hon. Gentleman saying that we should go against the wishes of the local authority?

Mr. Colvin: I am not saying that. If the hon. Gentleman has listened, he would have heard that I said by passing the amendment we would enable the local authority in future, should it so decide, to allow a market to trade on Sunday. The composition of the local authority will no doubt change as elections take place. The elected councillors who made the decision, and who presumably gave evidence in Committee, may change. When they change, the new council may take a completely different view. What we are talking about is in a sense an enabling measure.
It may be of interest to the House to consider the attitude of the trade unions. Perhaps there is an hon. Member present who can enlighten us as to how many of those who man trading markets are members of the Union of Shop, Distributive and Allied Workers, which has been resolute in its opposition to Sunday trading. In the case of trading markets, I do not think that there are many members of that trade union involved, so I cannot see that those who are in the business of manning stalls in statutory trading markets should necessarily be opposed to trading on Sunday.
I also believe that the National Market Traders Federation would like its members to be entitled to trade on Sunday, if they wish, and they do not want local authorities to take them to court for breaking the law. I remind the House that the last time a survey was done on the attitude of the public towards Sunday trading, 72 per cent. were in favour of reform. That is overwhelming support.
Because the principle of Sunday trading is crucial to the amendment, it is as well to remind the House of the basis upon which the committee of inquiry under Mr. Robin Auld, QC, was established in August 1983 to examine proposals for amending the Shops Act 1950, which is the basis upon which traders are taken to court by local authorities if they are seen to be trading on a Sunday. The terms of reference of the committee of inquiry were:
To consider what changes are needed in the Shops Act, having regard to the interests of consumers, employers and employees, and to the traditional character of Sunday, and to make recommendations on how these could be achieved.
As you will recall, Mr. Deputy Speaker, in its report the committee came down overwhelmingly in favour of Sunday trading. It was therefore regrettable that Parliament, when asked to consider the matter on a later occasion——

Mr. Deputy Speaker: Order. I do not think that this is the appropriate moment for a general debate on Sunday trading. Parliament has already dealt with that. It is beyond the terms of the amendment before the House.

Mr. Colvin: I accede to your request, Mr. Deputy Speaker, to bring the debate more into line with Redbridge and the market which we are considering in today's debate.
When the House last voted on this issue, it voted against a change in the existing law, but it was a very close run thing. The debate was on 14 April 1986 and the vote, which was a free vote, was lost by only 14. The pity about the Second Reading debate is that the House never had the opportunity to discuss any compromise on Sunday trading. Had it done so, perhaps we could have finished up with an Act on the statute book which would have taken account of the special needs of statutory markets.

Mr. Squire: Does my hon. Friend agree that one of the many compromises which might have been open to the House was directly relevant——

Mr. Deputy Speaker: Order. I have just reminded the House that Parliament has already decided the general policy on Sunday trading. We cannot use this modest amendment as a vehicle to reopen the debate and have an inquest on what alternatives Parliament might or might not have considered agreeable. We have to get back to Redbridge.

Mr. Colvin: I conclude by saying that the debate on Sunday trading will continue both in the House and outside. The House has an exceptional opportunity with the Bill before us to send a signal to the Government that it feels that with the passage of time the opinion of the House has changed and is more in line with the opinions of those whom we represent. My hon. Friend the Member for Epping Forest (Mr. Norris) made a brave attempt last year to bring forward a private Member's Bill to amend the law on Sunday trading and the amendment in my name is aimed at sending another signal to Government that it is high time that the House was given the opportunity——

Mr. Harry Barnes: I wonder what the hon. Member's attitude is towards the other amendments. That could influence our attitude to his point about Redbridge and Sunday trading. He is making a speech about Sunday trading generally, whereas we are discussing the situation in Redbridge. There is some inconsistency in the conjunction of the amendments as the amendment to which he is speaking would theoretically allow markets to be open for seven days while other amendments would reduce it to one or two days.

Mr. Colvin: The only amendment on which I wish to speak is the one tabled in my name. If the House makes a decision on the remaining amendments it will be up to the House to set my amendment aside. We do not wish to lay down the law emphatically on the way local authorities conduct their affairs with regard to statutory markets. We should enable authorities to take such decisions as they see fit in the light of the feelings of their electors, and that is precisely what my amendment seeks to do.

Sir Nicholas Bonsor: My hon. Friend the Member for Hornchurch (Mr. Squire) mentioned the threat to Romford market from what is happening in Ilford. Recently, the borough of Havering has heard from Romford and Dagenham. They want information on this issue. That leads us to suspect that they will seek to follow the example set by Redbridge and will also seek to infringe the rights held by Romford market. When they do that——

Mr. Vivian Bendall: What sort of information did they seek?

Sir Nicholas Bonsor: I had a letter from the chief executive of my borough—Havering—telling me that the borough of Barking had been in touch with him to seek information and specific details about our market rights, which leads him to suspect that they propose to follow the route taken by the borough of Redbridge.
If the House decides to give passage to the Bill, I find it hard to see how it can differentiate in the case of Barking and all the other boroughs throughout the country which will seek to follow Redbridge's example. We are not talking only about what is happening in Romford and Redbridge.
Sunday trading is an important issue from the point of view of people in my borough, and we must not skirt over it, notwithstanding the speech by my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) which seemed to cover a wider scope than the amendment that we are now discussing.
The effect of the Shops Act 1950, and the way in which Sunday trading may or may not apply to what is proposed for the new market in Ilford, is of great importance to us. We must deal with it fully.
We are talking about rights in Romford which go back some 800 years, and are deeply steeped in history. It is worth making the point that that is also true of Sunday trading restrictions. Hon. Members will undoubtedly recall that Sunday trading restrictions date back to the Sunday Fairs Act 1448 and were strengthened by the Sunday Observance Act 1677 and have been in the law ever since.
Whatever the merits, or rights and wrongs, of Sunday trading, this is certainly not the appropriate Bill—as the hon. Member for Derbyshire, North-East (Mr. Barnes) said—for Sunday trading to be introduced in legislation. The reason that I say that is, first, that we have to consider the fifth schedule of the 1950 Act—
Transactions for the purposes of which a shop may be open in England and Wales for the serving of customers on Sunday".
In this case, there was no reason why the market stall should not be put in the same position as the shop. The list is fairly comprehensive, and I shall take out those items that may have relevance, or would have relevance to market stalls that I suspect that my hon. Friend's council is likely to put in Redbridge market. Were it to do so, the following stalls would fit in the definition of the fifth schedule of the 1950 Act: those which serve
meals or refreshments, whether or not for consumption at the shop at which they are sold, but not including the sale of fried fish and chips at a fried fish and chip shop; … newly cooked provisions and cooked or partly cooked tripe; … table waters, sweets, chocolates, sugar confectionery and ice-cream, (including wafers and edible containers); … flowers, fruit and vegetables (including mushrooms) other

than tinned or bottled fruit or vegetables; … milk and cream, not including tinned or dried milk or cream, but including clotted cream whether sold in tins or otherwise; … aircraft, motor, or cycle supplies or accessories".
I noted that when this issue was discussed in Committee—I was not a member of the Committee—Redbridge council said that it would specifically not include aircraft, motor or cycle supplies or accessories. As I was not present, and as I am afraid that I have not had the chance to read all the details of what went on in Committee, perhaps my hon. Friend the Member for Ilford, South (Mr. Thorne) could enlighten me at some stage as to why that was mentioned in Committee. It seems to me that it might have had something to do with Redbridge council attempting to distance its proposals from the terms of the 1950 Act.
The list continues:
newspapers, periodicals and magazines; … guide books, postcards, photographs, reproductions, photographic films and plates, and souvenirs … requisites for any game or sport at any premises or place where that game or sport is played or carried on"—
perhaps this is not relevant to Redbridge market but it is deeply steeped in the history of the whole affair—
fodder for horses, mules, ponies and donkeys at any farm, stables, hotel or inn.
My reason for reading that list out is that a huge number of the items I have mentioned will undoubtedly be sold in the market in Ilford. I am not clear whether the terms of the Shops Act 1950 will allow stalls to open on Sunday or not, and I should like some enlightenment from my hon. Friend when he tells us the reactions of his borough to the proposals in the amendments.
The second category in the 1950 Act for which trading on Sunday is allowed is in section 48, which says that the local authority is empowered to make partial exemption orders permitting shops to be open for part of Sunday for the sale of bread and flour, confectionery, fish and groceries. I also suggest that many of those items will be on sale in the market, and I wonder whether the Shops Act 1950 applies to it. If it does, will the council allow the market to open on Sunday, notwithstanding whatever may be said by the House about the amendment?

Mr. Harry Barnes: The hon. Member is pursuing the line that it seems that there will be a considerable overlap between what will be for sale in the market and what could be available in the shops in the area. The hon. Member for Romsey and Waterside (Mr. Colvin) said that people in markets are often not organised in USDAW, which is the union that operates in shops, yet USDAW members will be prominent in the shops, so their interests begin to be directly related to what happens in the market because it may cause their shops to be opened on Sunday.

Sir Nicholas Bonsor: The hon. Gentleman is undoubtedly correct. However, I am trying to explain that I am not clear whether my hon. Friend the Member for Ilford, South, who is sponsoring the measure, needs the amendment or whether the market could happen willy-nilly. Before we can make a decision on voting on the amendment in the Lobbies, that point must be made clear.
The third category dealt with by the 1950 Act, in section 53, concerns people who observe the Jewish sabbath. At present, as I understand it, they may open shops on Sunday until 2 pm, but must close the shops on Saturdays instead. I am not clear whether this will apply to the proposals for Redbridge. If they may do that under the


1950 Act, and if my hon. Friend's proposal is that Redbridge market should be open on Saturday, would members of the Jewish faith who have stalls in the market be able to make an application that they should be allowed to trade on Sunday instead of Saturday? According to my reading of the 1950 Act, there is no reason why that should not be so, but it would ride a coach and horses through the legislation with which we think, at least, that we are dealing this evening.
Section 54 of the Shops Act make special provision for Sunday opening in respect of street markets and shops that have customarily been held, or open, on Sundays in some parts of London. On the face of it, that is an extremely potent argument in favour of the amendment: if many other London markets are already empowered specifically to open on Sundays, Redbridge—as part of the Greater London area—should be able to do the same. As far as I know, however, Romford is not among the markets that have opened on Sundays, and I therefore do not think that it would he appropriate to allow Ilford to creep in under section 54 of the Act to obtain a power that would be denied to Romford because it has traded for so long without trading on Sundays.
The administration and enforcement of the Shops Act is the responsibility of local authorities—that is, the common council of the City and the London borough councils. Each authority has a duty to appoint inspectors to enforce the Act. Debates in the House and comments in the press have often suggested that the extent to which those powers are enforced varies a good deal between authorities, and that is of course true.
My hon. Friend the Member for Hornchurch has already said that he is worried about the number of letters that he has received complaining that the London borough of Havering is enforcing the regulations on Sunday trading to an excessive degree. I too have received some angry letters about the way in which the local council is pursuing some of the shops in Havering to ensure that they abide by the law. I do not make that complaint myself, because I believe that laws that have been enforced by the House should be enforced until such time as we see fit to change them. As I said at the time of the proposal to change the law, I feel that Sunday trading should be allowed, but the matter has already been the subject of debates in the House—as you, Mr. Deputy Speaker, have pointed out.
We are confronted not merely by an opportunity but by a threat—that the law on Sunday trading will be undermined and reversed by what we decide this evening. It is important for us first to realise why a change in the law may be, overall, a good idea, and secondly to differentiate between that and the legislation that we are discussing tonight.
The essence of the proposal to allow Sunday trading in Redbridge market—and, perhaps, of the wider argument—is that this country's whole way of life has changed. The religious basis of the refusal to allow Sunday trading—which was addressed in the 1677 Act, and which has formed the foundation of our law for some 300 years—is much weaker now. Churchgoing habits have altered rapidly: I have no doubt that that applies to Redbridge, and I fear that it is also true in Romford. It is nonsense to suggest that the vast majority of people now think that Sunday trading would be against the religious principles on which our society is rightly based.
Another argument for allowing Sunday trading is the importance of people's quality for life. Sunday is the day

when families can get together and, among other things, go shopping. According to my hon. Friend the Member for Romsey and Waterside and others, that is a good reason for undermining the present law, and introducing a chink into the armour that has so far resisted all the efforts of private Bills to allow Sunday trading.
Although there is some strength in that argument, I do not feel that it is strong enough, for two main reasons. First, it would give Redbridge an unfair advantage over my borough, which would certainly not be able to trade on Sundays under the law as it stands. Secondly, I suspect that a more general proposal for wider legislation would also not meet with success because of our strong inbuilt resistance to change in the current Sunday trading laws.
7.45 pm
Let me remind the House of some of the failures of the not-too-distant past. There was an attempt to introduce Sunday trading in the Shops Bill 1956–57, and more attempts in 1967–68. In that year the Shops (Sunday Trading) (No. 2) Bill was presented by Lord Derwent in the other place, and he made another attempt in 1970–71 in the Shops (Sunday Trading) Bill. The Shops (Weekday Trading) Bill was presented in 1970–71 by Mr. Evelyn King, later Lord King.
Sunday trading legislation was tried again in the Shops (Holiday Resorts—Sunday Trading) Bill presented by Baroness Phillips, and yet again in a ten-minute Bill by Clement Freud in 1976—the Shops (Sunday Trading) Bill. Further attempts were made by Sir John Langford-Holt in 1976 and 1977. My hon. Friend the Member for Romford (Mr. Neubert) presented a ten-minute Bill in 1978. It is not directly relevant to what we are discussing now, but I am sure that he would take the same view as I do. Nevertheless, there is a broader view that a change in the law is desirable; I do not wish to waste the time of the House, but I could give at least eight more examples of attempts to change it in the past few years.
I believe that, on that wider base, the initiative should be allowed to succeed, but in this instance such a move would be divisive and also unfair to shopkeepers, whose trade would be threatened by Sunday trading on the part of stallholders.

Mr. Harry Barnes: The hon. Gentleman's list shows the extent to which the general principle of Sunday trading has been debated, but is entirely inappropriate—almost in a procedural sense—to discussion of this measure. We are debating something much more specific, and it would be quite wrong to push through a measure that might have knock-on consequences when the House is half asleep.

Sir Nicholas Bonsor: I take the hon. Gentleman's point; indeed, it is in line with my feelings about the amendment, although I would feel differently if we were dealing with the broader issue. I feel that the proposal would be extremely unfair on Romford council, and on everyone trying to trade within the vicinity of the proposed shopping area.

Mr. O'Brien: There are other possibilities of unfairness. When we last debated the Bill, we were told that Redbridge council would not necessarily run the market, and that its operation might be taken over by a third party—a private individual. Is there not a danger that such an individual


would seize the opportunity to exercise more unfairness in relation to the local shopping community and the neighbouring markets?

Sir Nicholas Bonsor: I take note of what the hon. Gentleman says. This is not the appropriate moment to pursue legislation that would gradually create wider powers for Sunday trading. I support the ultimate objective, but I do not support the steps that would be taken to get there if we were to use a creeping method, which would be one effect of passing the Bill. When we go into the Division Lobbies, I suspect that the hon. Gentleman and I will find ourselves in the usual position of being on the same side of this matter.
As for the other amendments in this group, there is a proposal that the market should be allowed to be held on only one day a week. My hon. Friend the Member for Hornchurch made that proposal. As I am of a much more generous disposition and spirit, I have proposed that the market should be allowed to be held on two days a week—if Redbridge is to be allowed to have it at all, to which I have objected throughout.
It must be wrong that the Redbridge market should be open for the whole week. That is asking a great deal of hon. Members. I referred to that point on Second Reading, and I have heard nothing in the meantime to make me change my opinion. On that occasion, I referred to the fact that not many hon. Members were present, and few hon. Members are here now. Therefore, the point bears repeating so that it reaches a slightly wider audience.
My hon. Friends the Members for Ilford, North (Mr. Bendall) and for Ilford, South propose that there should be 80 stalls a day, on six days a week. That would provide Redbridge with an enormous number of stallholders. I do not recall having heard or read anything about the number of stallholders who would have a stall for six days a week, or about how many different stallholders would have a stall for one day a week. We should probably find that as many stallholders were occupying their stalls as those who are occupying the Romford stalls on a day-stall basis. That proposal would pose a great threat to the Romford market.
Times have changed. People have no difficulty in getting to a market. The legislation was drafted on the basis that it was extremely difficult in the old days to travel by horse or by foot to market. Most people travelled by foot to market because only the comparatively rich could travel to market by horse. The reason for the six-and-two-thirds-mile-limit was precisely the need to protect traders within an area where one could easily travel to market.

Sir Bernard Braine: Within one day.

Sir Nicholas Bonsor: Yes, within one day, as my right hon. Friend reminds me.
It is now possible to travel many miles within a day. Our wives get into the car and travel long distances to a sale where they wish to buy something, or to a shop that stocks an article that they want to buy. The need, therefore, for two markets in the area has not been established.
As for the point that is raised by the amendment, would it be right for one of the markets to be open six days a week

so that housewives in exactly the same catchment area of the two markets would be able to go to one of the markets six days a week?

Mr. Harry Barnes: One also has to consider the traders. As the hon. Gentleman said, people no longer walk to market, but saturation point must be reached when it comes to those who want to be involved in trading.

Sir Nicholas Bonsor: I take note of what the hon. Gentleman says. If the market were open for six days a week, it would pose a substantial threat to the Romford market and to all those who are trading in the area.
The Romford market is open on Wednesdays, Thursdays and Saturdays. On Mondays and Tuesdays, many of the people who normally come to Romford to do their shopping in the market do not go shopping in order to preserve Romford market's trading position on Wednesday. My hon. Friend the Member for Ilford, South wants the market to be open in direct competition with mine, on the days on which mine is open. He also wants it to be open on the first two days of the week, when mine is not open. The House ought not to grant powers of that kind. It would contravene statutory rights and historic common law rights that have been preserved for centuries.
I should be grateful if my hon. Friend would explain why he thinks that it is necessary for Redbridge to have that six-day right, whereas we have been content for a very long time with the three days that we enjoy at the moment. I should also like him to explain what the consequences will be for Romford. There is certainly not room for both of us, according to the timing proposed by my hon. Friend.
If such a power is granted, we shall disregard what the powers that have run this country for a thousand years have said is right. Furthermore, we shall disregard what has always been protected by statute and what the House has always laid down in the past. Against the will of the council that is the recipient of these ancient rights, direct competition would be allowed within its restricted area of six and two thirds miles.
I am sad that there are so many empty Benches. As my hon. Friend the Member for Romsey and Waterside said earlier, this does not affect just Redbridge and Romford: it affects the whole community. There are 284 markets. Will the precedent that we are proposing to set, if the Bill is given a Second Reading and duly passes its Third Reading on another day, be disregarded? Shall we be the only market that is affected by the Bill?
I suggest that that will not happen. The Bill will be used as a precedent. There will be an unstoppable flood of hon. Members coming to the House and taking up a vast amount of parliamentary time on similar Bills. It would be neither right nor proper to have to deal with 284 applications such as this one during the next heaven knows how many years, nor would it be right for this House to be asked to change the general law and to abolish market rights that we have enjoyed for so long.

Mr. Barnes: In the 17th century, the tradition was to introduce Bills of this type. In later times, general legislation was introduced; the law was consolidated. For example, local enclosure measures were followed by a general Enclosure Act. After several Bills relating to markets had been passed, it might be thought that the law ought to be consolidated and there would be general legislation.

Sir Nicholas Bonsor: That is a very good point. It is not right that changes of great magnitude should be made in this way. Redbridge has introduced this measure because of its parochial and self-centred desire to get itself a market, in contravention of all history and tradition. That is not the right way to go about it. If a change is to be made which will have national consequences, we ought to introduce legislation to cover all markets. Then it would be not only my hon. Friends the Members for Hornchurch and for Romsey and Waterside and I who would be deeply concerned about the results of the legislation: all my hon. Friends who have markets in their constituencies would come here to support us. I believe that such a proposal, with the assistance of many Opposition Members, would be defeated.

Mr. Barnes: My reason for taking part in the debate is that Chesterfield market is almost exactly six and two thirds miles from Dronfield, my own town, which is in the neighbouring constituency.

8 pm

Sir Nicholas Bonsor: It is a great relief that the hon. Gentleman is supporting me. As a consequence of what happens tonight, Dronfield might decide to set up a market, although I am sure that the people of Dronfield would be much too sensible to do that, because in that part of the country, as in my own, there is demonstrably not room for two such markets, let alone three, in such a confined space.
I remind the House of what I said about Barking and Dagenham. If they wish to set up a market, we will come back here and go through precisely the same procedure all over again. On that occasion, Romford would have about the same chance of winning a vote as we do tonight, because it is piecemeal legislation, involving one local borough against another, and I am afraid it has not commanded as much attention as it should.
I am rather disappointed that my hon. Friend the Minister cannot take a robust view. That is most undesirable, and certainly not in line with the Government's wish to preserve markets in such a way that they can remain profitable and effective. I know that it is not the wish of a Conservative Government to change without good reason rights which have been enjoyed for 1,000 years.
I hope that I have made the points that I wish to make on the three amendments. I am not quite clear whether we shall have one or three votes, but clearly the amendments require individual attention. It might be greatly to the advantage of the House if we were to divide on each of them, but that is a matter for you, Mr. Deputy Speaker.

Mr. Neil Thorne:: I shall try to deal with the points as they arose.
My hon. Friend the Member for Hornchurch (Mr. Squire) said that the 300 stallholders had an average of two stalls each, making a total of 600, and that there was no waiting list. I found that rather surprising because on a previous occasion I said that Redbridge had had 250 applications for the 80 stalls. If stallholders were to have two stalls each, there would be only 40 possible opportunities. That would suggest that a number of stallholders in Romford believe that they could profitably

have a stall in the Redbridge market, too, and therefore have confidence in a demand which others have suggested does not exist.

Sir Nicholas Bonsor: Is not my hon. Friend ignoring the fact that it is well known that Redbridge market is seeking the right to remain open for six days a week? It is absolutely wrong for him to suggest that market traders would be in Romford for our three days and in his constituency for the other three days. It is much more likely that they would decide to set up their stalls for six days in the same place rather than to-ing and fro-ing. That would make a great deal of economic sense and is one reason why I oppose him so strongly.

Mr. Thorne: My hon. Friend does not understand market traders as well as I thought he did. If he did, he would appreciate that market traders normally work as a family and that the father, mother, daughters and sons are usually in the business together. They are likely to have a stall in Bexley on the same day as they have a stall in Romford, and it is very likely that they will want a stall at Ilford on the same day. So I do not think that there is likely to be any such conflict. They are unlikely to move into Redbridge and ignore Romford. Romford is a substantial, well-established and viable market with 600 stalls and an established clientele which I do not think will be affected in any way by an 80-stall market at Ilford.

Sir Nicholas Bonsor: I understand market traders well enough to know that none of their families are sitting on their backsides waiting for the legislation to go through the House. It is nonsense to say, as my hon. Friend suggests, that they are unoccupied at the moment. Of course, Romford is a well-established, successful and thriving market. That is because it has enjoyed statutory protection for nearly 1,000 years. My hon. Friend is trying to destroy that success and stability and that is why he is wrong.

Mr. Thorne: As I said on a previous occasion, I do not under any circumstances agree that a market of 80 stalls can possibly undermine a 600-stall market at Romford. have visited Romford market for more years than I care to remember and I shall continue to do so. I believe that the matter of a small market in Ilford is purely coincidental, so I do not think that my hon. Friend makes a relevant point.

Mr. Squire: None the less, it is worth recording that if it were merely coincidental, the question of compensation would not have been discussed or put into the Bill. That is a recognition that it is more than coincidental. Obviously, my hon. Friend is making the case for the Bill, but even he would accept that.

Mr. Thorne: I said to my hon. Friend previously that I accepted the compensation provisions purely and simply because the Opposed Bills Committee which considered the matter in considerable detail, on the advice of counsel appointed by the respective councils, reached that conclusion. That was not my view. I felt that it was extremely generous and unnecessary, particularly as on only two days in the week would there be any conflict between what Havering does at Romford market and what Redbridge wishes to do.

Mr. Bendall: Does my hon. Friend agree that the many markets in east London which are very close together all do exceptionally well and that there is no deterioration of business in any of them?

Mr. Thorne: My hon. Friend makes a good point. The number of markets encourages people to use them. I believe that when people have successfully visited some of the stalls in Ilford market, they will be more ambitious and will see what the 600 stalls in Romford market have to offer. I have every confidence that within a year or two of the passing of the Bill, by the will of the House, both markets will be thriving even more than now. That is my honest belief.
I am informed that no protection is sought for Redbridge market, so it is unlikely that a six and two thirds mile limit will be relevant. The calculation of compensation was dealt with on a previous occasion.

Mr. O'Brien: Compensation was decided on the understanding that the market would operate six days a week. Do not proposals for Sunday trading alter the formula for assessing compensation?

Mr. Thorne: I think not, because the proposal of the Opposed Bills Committee would still apply. That measure was not sought by the London borough of Redbridge. Redbridge has been most diligent in applying the Shops Act 1950 and insisting that shops shall not trade on Sunday. It has been far more diligent in enforcing the law in that regard than any other authority in the neighbourhood. There is no reason to suppose that the borough would agree to allow Sunday trading in the market in advance of a decision to the contrary by the House. Any question of letting the land to another operator would be on the condition that it were not used in that way. There is no question but that the authority did not apply for Sunday trading. If the House wishes to give that right, it will be accepted but not used.

Mr. O'Brien: I am following the hon. Gentleman's argument closely. The hon. Member for Romsey and Waterside (Mr. Colvin) said that amendment No. 2 is an enabling amendment. If the constitution of the council changed after an election, it could use the amendment to allow Sunday trading, although the present council opposes it. Is not there a danger that the amendment may lead to the principles and policies of the council being ignored or disregarded? I suggest that we should reject amendment No. 2 to ensure that the council's principles are adhered to.

Mr. Thorne: I should be happy if all three amendments were rejected. Amendment No. 2 would enable the council to hold a market on Sunday. The council has been Conservative-controlled for the past 25 years, but if it were to change another political party might decide differently.

Mr. Bendall: Such a change could not be made if the premises, property or land on which the market will be situated were let and there was a clear clause in the contract not permitting Sunday trading.

Mr. Thorne: My hon. Friend is right. I assume that tenants may apply for a waiver if they wish. If the landlord agreed to a waiver, there could be Sunday trading. But I am not asking the House to pass the amendment any more than I am asking it to pass the other two. If the House decides to give the authority such a power, it will accept it but not use it.,/lb>
The hon. Member for Derbyshire, North-East (Mr. Barnes) asked about prohibition, but that was not requested.
It has been suggested that the Bill is likely to lead to a stampede for waivers for markets. The private Bill procedure is expensive and takes a long time. Authorities are not likely to rush into it unless they are convinced that it is the right thing to do.
Hon. Members asked how many constituencies are likely to be affected by the Bill. My constituency does not stretch six and two thirds miles in any direction. In large constituencies the distance between markets would not be a problem because they would probably be under the same local authority. It is wrong to suggest that 284 charter markets are likely to be adversely affected by the Bill.

Mr. Bendall: When the original limit of six and two thirds miles was set, London had not spread out to the extent that it has now, which is obviously why that limit was set in those days.

Mr. Thorne: Indeed.
The hon. Member for Derbyshire, North-East raised the question of union interests in shops. Norwich Union and Prudential are developing a substantial shopping mall in my constituency. They believe that a street market would help the promotion of the centre. Far from detracting from the interests of shop workers, it would enhance their numbers and their pay bargaining opportunities. I have no doubt that the proposed market would benefit workers in Ilford.

Mr. Harry Barnes: The hon. Gentleman is saying that the market would be generally beneficial to the area, but I assume that it would not operate on Sundays.

Mr. Thorne: That is right. Sunday trading in the market would be unfair to the other shops in the area, and the council would not grant permission for it. Moreover, I am certain that it would stipulate in the lease that the market could not open on Sundays. As I said before, I shall not ask the House to vote for any of the three amendments.
I was asked several technical questions by my hon. Friend the Member for Upminster (Sir N. Bonsor). Those issues would be dealt with in exactly the same way as his authority deals with technical matters relating to Romford market. There is no intention to require anything different.
My hon. Friend the Member for Upminster made considerable play of the fact that it has been requested that the market should open six days a week. It is clear that market traders would use the market only as and when they wanted to, and there is nothing to prevent his authority from opening its market on Monday, Tuesday or Thursday as well as Wednesday, Friday and Saturday. Redbridge would not object to it doing so.

Sir Nicholas Bonsor: My hon. Friend has fallen into a trap. My authority would not wish the market to open on those days because there is insufficient room for it to trade.

Mr. Thorne: My hon. Friend does not appreciate that if there is no demand there is no question of forcing street traders to trade on those days. If they wish to take a stall at Ilford market on another day they can do so, just as they could in Romford market. If there is no demand, the market will not open.

Sir Nicholas Bonsor: If there is no demand, my hon. Friend's local authority will discover that its market does not work, but in so discovering it will have destroyed Romford market.

Mr. Thorne: I cannot in any circumstances accept that Romford market, which has 600 stalls and which is extremely well run and viable, will be affected by a market five and a half miles away with a maximum of 80 stalls. It is not sensible to make such a suggestion. If anyone will suffer, Ilford market will suffer most and more immediately. The council would not proceed with the market if it were not viable. It would therefore have wasted its money obtaining the Act of Parliament to give it permission for the market. I am not so despondent, because I believe that Redbridge and Havering markets will be successful. In three years' time, both will be extremely viable and well run.

Mr. Harry Barnes: The hon. Gentleman said that the council would not pursue the market if it were not viable, but having given such a commitment and having sponsored the Bill, it may give the benefit of the doubt to the market being viable in the future. The act of seeking the legislation will influence its attitude in the future.

Mr. Thorne: The hon. Gentleman said that the local authority might find that the market was not running economically. However, the district auditor would have something to say if the London borough of Redbridge started to try to run an unviable market. The London borough of Redbridge is an extremely cautious and careful authority. It manages its street markets well and does not enter into enterprises that it thinks will be unviable in the first place. If it were later to find an enterprise unviable, it would not subsidise it to give an unfair advantage to its market over another. In those circumstances, I hope that the House will decide to reject all three amendments.

Mr. Squire: I sense that the House wishes to move to a Division and I do not want to detain it long. I have listened—as ever—carefully to my hon. Friend the Member for Ilford, South (Mr. Thorne). The position with the Bill is rather as it is with much legislation in this Chamber. My hon. Friend cannot say that he is certain what the outcome will be, any more than the rest of us can. It seems logical that it will, more likely than not, lead to similar legislation coming before us. That seems to be the nature of things, but I do not want to go over the arguments again.
I noted my hon. Friend's comments on the wording of amendment No. 2 and, in the circumstances, I recognise that it might make little difference were it put to the vote. I also realise that I may be missing a few of the 400 hon. Members whom I mentioned earlier as taking part in such a Division.
As the central issue for those resisting the Bill is that Havering is being asked to give a compulsory licence in perpetuity to grant another market rights in competition, we shall seek to divide the House on amendment No. 3—subject to your comment, Mr. Deputy Speaker—which seeks to limit the operation of that market.

Amendment negatived.

Amendment proposed: No. 3, in page 2, line 18, at end insert
'save that the market shall not be held on more than two days a week'.—[Mr. Squire.]

Question put, That the amendment be made:—

The House divided: Ayes 44, Noes 77.

Division No. 98]
[8.22 pm


AYES


Abbott, Ms Diane
Hinchliffe, David


Allen, Graham
Hughes, John (Coventry NE)


Banks, Tony (Newham NW)
Jones, Barry (Alyn &amp; Deeside)


Barron, Kevin
Lofthouse, Geoffrey


Bermingham, Gerald
Meale, Alan


Brown, Ron (Edinburgh Leith)
Miller, Sir Hal


Buchan, Norman
Mullin, Chris


Burt, Alistair
Neubert, Michael


Caborn, Richard
O'Brien, William


Callaghan, Jim
Pike, Peter L.


Cox, Tom
Powell, Ray (Ogmore)


Cryer, Bob
Skinner, Dennis


Dalyell, Tam
Spearing, Nigel


Davies, Ron (Caerphilly)
Squire, Robin


Dixon, Don
Taylor, Mrs Ann (Dewsbury)


Duffy, A. E. P.
Wells, Bowen


Dunnachie, Jimmy
Widdecombe, Ann


Durant, Tony
Wigley, Dafydd


Eastham, Ken
Williams, Alan W. (Carm'then)


Flynn, Paul
Wise, Mrs Audrey


Gill, Christopher



Godman, Dr Norman A.
Tellers for the Ayes:


Golding, Mrs Llin
Mr. Harry Barnes and Sir Nicholas Bonsor.


Haynes, Frank





NOES


Alexander, Richard
Jopling, Rt Hon Michael


Allason, Rupert
Kilfedder, James


Arbuthnot, James
King, Roger (B'ham N'thfield)


Aspinwall, Jack
Kirkhope, Timothy


Beaumont-Dark, Anthony
Knapman, Roger


Bellingham, Henry
Knight, Greg (Derby North)


Bendall, Vivian
Lightbown, David


Bennett, Nicholas (Pembroke)
Lord, Michael


Bevan, David Gilroy
Maclean, David


Brazier, Julian
Mans, Keith


Bright, Graham
Mitchell, Andrew (Gedling)


Browne, John (Winchester)
Monro, Sir Hector


Buck, Sir Antony
Montgomery, Sir Fergus


Budgen, Nicholas
Moss, Malcolm


Burns, Simon
Newton, Rt Hon Tony


Butterfill, John
Oppenheim, Phillip


Carlisle, Kenneth (Lincoln)
Paice, James


Carttiss, Michael
Parkinson, Rt Hon Cecil


Chapman, Sydney
Riddick, Graham


Coombs, Simon (Swindon)
Ryder, Richard


Currie, Mrs Edwina
Shaw, David (Dover)


Davies, Q. (Stamf'd &amp; Spald'g)
Shaw, Sir Michael (Scarb')


Dorrell, Stephen
Shephard, Mrs G. (Norfolk SW)


Emery, Sir Peter
Shepherd, Colin (Hereford)


Evennett, David
Skeet, Sir Trevor


Fenner, Dame Peggy
Stewart, Allan (Eastwood)


Franks, Cecil
Stradling Thomas, Sir John


Fry, Peter
Summerson, Hugo


Gow, Ian
Taylor, John M (Solihull)


Greenway, Harry (Ealing N)
Tebbit, Rt Hon Norman


Hague, William
Thorne, Neil


Hampson, Dr Keith
Thurnham, Peter


Hargreaves, Ken (Hyndburn)
Tredinnick, David


Harris, David
Waddington, Rt Hon David


Hayes, Jerry
Wheeler, Sir John


Heathcoat-Amory, David
Winterton, Mrs Ann


Irvine, Michael



Jack, Michael
Tellers for the Noes:


Janman, Tim
Mr. David Amess and Mr. Tim Boswell.


Jones, Gwilym (Cardiff N)



Jones, Robert B (Herts W)

Question accordingly negatived.

Clause 6

As TO TRANSFER OF RIGHTS

Mr. Squire: I beg to move amendment No. 5, in page 4, leave out lines 16 and 17.

Mr. Deputy Speaker: With this it will be convenient to discuss amendment No. 6, in page 4, line 17, at end add
if the trade to be carried out by the purchaser is materially different to that which is undertaken by the vendor".

Mr. Squire: Obviously I am marginally disappointed at the outcome of the Division, but I shall try again.
The debate on these amendments will be much more specific than the one that has just ended. I suppose that even I can admit that I am tackling a fairly obscure part of the Bill—its last sentence. It is appropriate that amendments Nos. 5 and 6 should be taken together, as you, Mr. Deputy Speaker, in your wisdom, have decided. The central point is why it is necessary to have the last sentence:
Provided that such transfer or disposal of rights shall take effect without the consent in writing of the Council.
I am advised that, in respect of ordinary trading, there is no similar right. If a person who has run a greengrocery shop for 10 years wishes to sell that shop to another greengrocer, he may do so without reference to anybody else. The parties may make the appropriate arrangements and agree a price, and everything will proceed. As hon. Members with local authority experience will know, the local authority has to be consulted only if there is to be a change of use. If, for example, a greengrocer is to be taken over by a bank or a building society, different procedures apply. But those procedures are restricted to cases in which there is a proposed change of use; the Shops Act 1950 makes no reference to anyone requiring further approval if there is to be no change of use. In those circumstances, why is this provision necessary? The change that I propose would have the effect of bringing the matter into line with the provisions of the Shops Act.
We do not know—certainly we do not know tonight—the nature of the stalls that will be run in Ilford. There is nothing about that in the Bill. We can go only by the reasonably brief exchanges that took place in Committee. According to those exchanges, Redbridge has confirmed that greengrocers and clothes stores would be limited in number, that car accessory sales would not be permitted—a matter that was mentioned by my hon. Friend the Member for Upminster (Sir N. Bonsor)—and that the sale of live animals, fish and raw fish was likely to be prohibited. However—this is an important ancillary point—the Bill contains nothing about those limitations.
But all this tells us nothing about the need for the final words in the Bill. I have stressed that this is a small amendment, but the form of the Bill should be as close as possible to the Shops Act, which recognises that there is no need for the council to be involved in the simple replacement of one business by another of identical type. Of course, it will be up to the House to decide the precise form of the legislation, but I see no need for the council to be involved. I say to my hon. Friend the Member for Ilford, South (Mr. Thorne), in advance of his explanation, that, at first sight, this seems to be to be the very reverse of the free-market approach which, on other occasions, he has been so willing to endorse. This provision is

unnecessary. It retains a council involvement where none is needed. In those circumstances, I put forward the amendments.

Mr. Thorne: The purpose of the last sentence of the Bill is to make provision for good management. I am assured that, although it is not written into any statute for the benefit of Havering, that London borough chooses to confirm that the transfer of stores shall be by reference to it, and not automatically down a line of family members. That is only fair and reasonable. It will ensure good market management. It will ensure that traders who give good value for money—in other words, desirable people—are encouraged to trade at this market, and that people who are not likely to be good stallholders are discouraged.
The London borough of Redbridge has no wish to be unduly restrictive, but it wants to retain the right to approve people who wish to trade. It does not want some families of people to be in a position to monopolise stalls throughout east and south-east London. It believes that that would be a bad thing. For that reason, a modicum of control is necessary, but subject to that alone the London borough of Redbridge is most anxious that free and fair trading should be given every opportunity.

Miss Ann Widdecombe: I am grateful for this opportunity to comment because if the Bill is passed and other markets follow suit the amendment would have a major effect on what would happen locally on my patch. I am also concerned about the general principle embodied in clause 6, which seems extremely odd, as my hon. Friend the Member for Hornchurch (Mr. Squire) pointed out.
The clause implies that there will be something unique about markets in future. If someone wishes to set up shop, he can do so in the knowledge that he can dispose of that shop—a greengrocer's or hairdresser's shop or whatever so long as there is no change of use. All is well—he can go ahead and sell the business. That will have quite an effect on his decision to set up in business in the first place and on how he assesses his competitiveness.
If the owner of a shop had to bear it in mind from the start that he could not necessarily dispose of his premises if he wished, he might not enter into the enterprise in the first place. Likewise, if someone who is considering setting up a market or becoming a part of a market finds that he may be refused permission to dispose of his enterprise unless the council agrees he may think twice. After all, he can have no possible knowledge of what the composition of the council will be or how it may view the matter in a few years' time. He cannot know what his competitive position will be and he cannot possibly make any sensible estimates for the future. He simply will not know whether it is worth becoming a part of a market or setting up a market or joining an enterprise or becoming financially involved. He will have no idea because he will not know whether he can dispose of the enterprise in the same way as he could if it were a shop. That is most peculiar. It seems that we are being asked to grant rights in relation to a market but then to place over it such an enormous unbusinesslike cloud that it will be extremely difficult for anyone to make a sensible decision about whether to become part of it.
If I proposed to set up an enterprise and I was told "Sorry, normal planning rules will not apply—the council can decide at whim, even on a political whim, to tell you


that you cannot dispose of your asset as you wish," I should have to think twice about whether it would be worth engaging in such a business.

Mr. Squire: My hon. Friend makes a powerful case. Has she considered the possibility of there being a favourite son or daughter who the council may wish to take over the enterprise? As the Bill stands, that son or daughter would be able to take over by courtesy of the local authority.

Miss Widdecombe: Indeed, and I have not even come on to the question of abuse. I was merely considering the general principles involved and whether we should permit such an eccentric ruling to apply. My hon. Friend is perfectly right that the potential for abuse is vast. As I said, that could happen if the council changed its political complexion——

Mr. Deputy Speaker: Order. I must draw it to the hon. Lady's attention that she is straying wide of the amendments before us.

Miss Widdecombe: I must be guided by your ruling, Mr. Deputy Speaker. As I understand it, the amendment would nullify the effect of line 17, which says that no transfer or disposal of right shall take effect without the consent in writing of the council. I am endeavouring to explore—with your permission, sir—whether leaving the council with such a wide discretion, completely separate from all regulations currently in force, could have a detrimental effect on the provisions of the rest of the Bill. If the Bill is an enabling Bill to allow such markets and such franchises, it seems peculiar that this mammoth restriction should be built into it. I seek your ruling, sir. Am I in order or am I as wide of the amendment as you implied?

Mr. Deputy Speaker: I suggest that the hon. Lady should not take her argument further than she has outlined.

Miss Widdecombe: Thank you, Mr. Deputy Speaker. Encouraged by your ruling, I should like to explore the argument advanced by my hon. Friend the Member for Hornchurch.
If the Bill remains unamended and the council has blanket powers in future, those powers could be abused. I suggest that the possibility of such abuse and the need to take due cognisance of it must be part of the commercial decision of a person engaging in an enterprise. Is it sensible that they should be tied down in this way? Might it not be more sensible to bring the Bill into line with the Shops Act, as my hon. Friend the Member for Hornchurch suggested.
I do not wish to trespass on your ruling, Mr. Deputy Speaker, but I suggest that political considerations could apply. Someone considering engaging in such an enterprise could reasonably ask, "Do I trust this council? It may be like my local council, which undergoes swings and is never in the control of one party for very long. Is it worth my engaging in this enterprise, given that that sort of council exists?" That is an important consideration.
It seems right for my hon. Friend the Member for Hornchurch to suggest that we look for a more suitable framework and see whether existing laws are adequate to allow any potential trader to operate and feel reasonably safe. That is the point of the amendment. It would bring

us back to a change of use. If one is selling a greengrocer's shop to a greengrocer, that is fine. What one may not do is to sell a greengrocer's shop to somebody who wishes to sell pets or chemicals.
The amendment is eminently reasonable and I have heard no argument to negate my hon. Friend's point. This is a special Bill, which grants rights to one particular market, but it could have a chain effect. It is because of the potential chain effect that I am anxious that we get this right. I am not worried about this particular special market but I am worried about what will happen if the Bill becomes a basis for future franchises and future markets. I have heard nothing to suggest that my hon. Friend the Member for Hornchurch was not right that this is an eccentric clause—on top of the fact that the Bill takes one particular area and does something special for it.
People may be so entirely cavalier in deciding whether to engage in an enterprise that they do not care how they will dispose of it if it does not work or if their personal circumstances change, but I think that unlikely. In any event, an important principle is surely involved. We have an adequate law which has been respected and has stood the test of time and which, moreover, has been well understood by councils, local politicians amd traders alike. We should therefore try to stay within that framework as far as possible. I cannot see the slightest reason for this highly eccentric individual rule which will not apply to anything else. That, too, is an important consideration.
If somebody wishes to become involved in an enterprise of this sort, he will look around to see what is there, not only in terms of no markets but, more importantly, in terms of fixed trading. He will know that the fixed trader has an advantage that he does not have under these eccentric provisions. What effect will that have? My hon. Friend said that the amendment was a small one. I contend that even if the Bill is sensible and intends to enable what it sets out to enable—my hon. Friend may disagree with me on that but I am prepared to give the sponsors the benefit of the doubt—the last two lines of the clause make it as hard as possible for those who want to take advantage of it to do so. That seems a peculiar position.
The sponsors may say that they wanted to give the council wider powers, perhaps because markets are a little different from fixed traders—they can become a nuisance and the citizens may not react favourably to them—and if market forces do not apply, perhaps the council should have some say. The Bill is a way of giving the councils some say. In that case, surely it is sensible to spell out a set of limitations, perhaps more restrictive than the Shops Act 1950 but less restrictive than this eccentric blanket proposal. Had that been suggested, there would have been some merit in those two lines.
It is most extraordinary. The promoters of the Bill have not intervened once to explain why this eccentric measure——

Mr. Thorne: Is my hon. Friend waiting for an intervention?

Miss Widdecombe: I am delighted to take one if my hon. Friend is offering one.

Mr. Thorne: I have already addressed the House, but perhaps I could be allowed to intervene to answer the points that my hon. Friend has made. First, it is normal for a landlord to have a right to approve a change of tenant. That is a normal procedure and is therefore quite normal


in this case. On the question of whether people should have an automatic right, the London borough of Havering and most other councils which control markets find it desirable to be able to stipulate whether they approve of the person to whom the market trader intends to pass on his stall. They do not wish to do so for reasons of nepotism or anything of that sort but simply to ensure that the trader who takes over is honest and reliable and will provide a reasonable service to the community. That is a perfectly reasonable thing for the public to expect. That is why the council would wish to be involved in that process. It would not wish to interfere unnecessarily but simply to make sure that standards are maintained.

Miss Widdecombe: I am most grateful to my hon. Friend for that elucidation. It introduces some logic into a position which hitherto seemed wholly illogical. I see the force of his argument that there must be some control over the nature of the tenant, his honesty, and so on, but once again—unless my hon. Friend can help me—I cannot relate that to the perfectly satisfactory position under the Shops Act whereby unless change of use is involved the transfer is more or less automatic, so there could be an unscrupulous tenant or a person of whom the council or landlord did not approve but that would not be the governing factor. The governing factors would be established planning and the tradition of the area and those shops.
If what my hon. Friend says is what he intended, I say again what I said just now. It would have been better if the limitations to which he referred had been spelt out. That would be better than a blanket measure which says that the council can refuse. It would not have to give reasons but would merely give or withhold consent. There is no guarantee whatever that the reasons would be honourable.
I have no reason to suppose that any council would engage in nepotism, but there is no safeguard against such abuse in the lines of the Bill to which I referred. The Bill gives an enormous remit. It simply says:
without the consent in writing
but says nothing about the conditions on which such consent should be based, the honesty, integrity or standards of the incoming tenant. There is not the remotest hint of that. It is just a blanket provision whereby councils may refuse, so a council could refuse for a whole host of bad reasons as well as a whole host of good reasons.
Although I should quickly be called to order if I dared to do so—I shall not do so—one could draw many parallels with other Acts where we define carefully what a council may or may not do, including the Shops Act. It is faintly surprising that on this occasion we have chosen to include a blanket provision. It has been explained, but it is still completely unqualified.

Mr. Tim Boswell: I am following my hon. Friend's argument with interest. Does she accept that the circumstances of a market are slightly different from those of a row of shops? One knows that simply from practical experience. Market traders are close up against one another. They can move from stall to stall and, indeed, may be seen doing so. Property can, as it were, move sideways. In contrast, shops are normally separate lock-up establishments in a defined space and much easier to

defend. I fully understand the arguments of my hon. Friend the Member for Ilford, South (Mr. Thorne), which bear on the issue of security. There may be some constitutional points in the argument which my hon. Friend the Member for Maidstone (Miss Widdecombe) advances. Nevertheless, they do not deal with the essential issue of market security.

Miss Widdecombe: I agree that reasons of security and the character of the landlord, which my hon. Friend the Member for Ilford, South put forward, are perfectly good reasons, but I return to the point that I was making—that none of those reasons has been defined. If an exhaustive list of reasons is not to be given—I accept that that would be impractical—the promoters could have attempted some limitation on the blanket proposal that a council should be able to withhold or give consent without any specified limitations.
My hon. Friend the Member for Daventry (Mr. Boswell) is right that there is a difference between a market and a row of shops. We can all immediately see the difference. It is therefore extraordinary that we should give protection to owners of shops, which are permanently in situ if something goes wrong but take less stringent action for markets, which are more fluid.
In conclusion—you will be relieved to hear me say that, Mr. Deputy Speaker—this is too much of a blanket proposal. If the Bill is successful, its effects will be felt not just in the individual case for which we are so eccentrically legislating, but throughout the country.

Mr. Harry Barnes: Are they such blanket provisions as the hon. Lady suggests? The amendment relates to the removal of a veto exercised by a council. It is not a matter of grace and favour in the hands of the council so that it can positively take action in an area, although I grant that if the veto were used often enough it could operate in such a way.

Miss Widdecombe: No, indeed. I was saying that a trader has to consider at the beginning the commercial viability of a project over which, according to the Bill, the council is to have unfettered rights of veto—I repeat, simply of veto. A trader may wish to dispose of his interest in the enterprise, but a veto exists. If a trader is disposing of a shop, he knows the terms under which a veto can be applied. He knows, for example, that if there is to be no change of use he can sell his bakery shop to another baker and all is well. We are not giving the same protection to a market trader, so anyone engaging in such an enterprise will be subject to the whims, the political inclinations, the nepotisms and all the other possible abuses or simply the sheer incompetencies of the council.

Mr. Barnes: Is the hon. Lady saying that the sponsors should have produced a set of conditions or that the rest of us should have been responsible for tabling amendments to set out a list of conditions which would have been stronger than those outlined in amendment No. 6? Presumably the hon. Lady feels that that amendment would improve the position, but that it would not be so good as acceptance of amendment No. 5.

9 pm

Miss Widdecombe: Amendment No. 6 absolutely and ideally takes care of what I am saying. Having given the right of veto to a council, which is perfectly proper—I do


not wish to prevent a council having the right of veto—it states the grounds on which the veto may be exercised. Those grounds are exactly the same as those set out in the Shops Act. When a trader started in an enterprise, he would know from the start that so long as there was no change of use and he continued the operations previously undertaken and then sold the enterprise to someone who would carry on the same trade, everything would be all right. Under the Bill as it stands, the trader does not even have that consolation. Indeed, he has no consolation at all.
Even if that state of affairs does not prey on the minds of traders, as I believe that it will, it opens up every last possibility for abuse. Under amendment No. 5, the council can give a veto under certain stipulated conditions which seem to be logical and in the public interest. I should certainly wish them to be applied if this situation ever arose in my constituency. That is reasonable. What I do not think is reasonable is the complete blanket proposal. I do not understand why the sponsors have not accepted the amendment. It seems such a logical thing to do. Not only would it save much argument and time, but it would produce a better Bill at the end of it all.
I was in the middle of summarising my case when the hon. Member for Derbyshire, North-East (Mr. Barnes) intervened. If the effects of the Bill are repeated elsewhere, two sets of trading rights will be created—those applying to a person with a permanent establishment and those applying to a person who operates in a market. If the trading rights are to be established in such a way that they militate against market traders, who will have no guarantee of commercial stability and when they take on an asset will not know whether they will be able to dispose of it, and if we put into the hands of councils certain powers that they do not have in any other area—the power to exercise a blanket veto without any reference in law as to the considerations on which the veto should be based and with nothing on the face of the Bill about what criteria should guide their decisions and inform their judgments—the possibilities for abuse are so obvious that they hardly need spelling out.
Those abuses need not be political or nepotistic. A council might simply have taken a financial decision which suddenly makes it inopportune to have a viable market where previously there was one. The council might then decide to proceed by way of piecemeal planning destruction. That is a perfectly reasonable possibility. Unless there is something to limit the right of veto and to spell out the factors on which a council should base its decisions, the provisions seem much too dangerous.
I do not have a view on the area affected because it does not fall within my responsibility to have such a view, but I certainly have a view as to what might be repeated in my own constituency, where there is an old established market and in constituencies such as mine with totally unreliable councils which swing from one party to another and from one policy to another. This is an extremely dangerous and nasty little blanket power, and it is completely unnecessary. The Bill could have been amended a long time ago if the sponsors had listened to reason. I commend my hon. Friend's amendment to the House.

Madam Deputy Speaker (Miss Betty Boothroyd): The Question is that the amendment be made——

Mr. Squire: rose——

Madam Deputy Speaker: Is the hon. Member for Hornchurch (Mr. Squire) seeking the Floor?

Mr. Squire: I do so simply as the mover of the amendment, Madam Deputy Speaker—and to say how nice it is to see you. I have been moved by the classic demolition of the sentence in question by my hon. Friend the Member for Maidstone (Miss Widdecombe). You were right, Madam Deputy Speaker—my speech was pallid in comparison with that of my hon. Friend. I concede that there is a major principle at stake here and we should divide on it.

Question put, That the amendment be made:—

The House divided: Ayes, 30. Noes 65.

Division No. 99]
[9.05 pm


AYES


Banks, Tony (Newham NW)
Neubert, Michael


Barron, Kevin
O'Brien, William


Cox, Tom
Pike, Peter L.


Dalyell, Tam
Powell, Ray (Ogmore)


Dixon, Don
Skinner, Dennis


Duffy, A. E. P.
Smith, C. (Isl'ton &amp; F'bury)


Dunnachie, Jimmy
Spearing, Nigel


Durant, Tony
Squire, Robin


Gill, Christopher
Taylor, Mrs Ann (Dewsbury)


Godman, Dr Norman A.
Watson, Mike (Glasgow, C)


Golding, Mrs Llin
Widdecombe, Ann


Haynes, Frank
Wigley, Dafydd


Hinchliffe, David
Wise, Mrs Audrey


Hughes, John (Coventry NE)



Jones, Barry (Alyn &amp; Deeside)
Tellers for the Ayes:


Lofthouse, Geoffrey
Mr. Harry Barnes and Mr. Bob Cryer.


Meale, Alan





NOES


Alexander, Richard
King, Roger (B'ham N'thfield)


Allason, Rupert
Kirkhope, Timothy


Arbuthnot, James
Kirkwood, Archy


Bendall, Vivian
Knapman, Roger


Bennett, Nicholas (Pembroke)
Knight, Greg (Derby North)


Bevan, David Gilroy
Lightbown, David


Browne, John (Winchester)
Lilley, Peter


Budgen, Nicholas
Maclean, David


Burns, Simon
Mans, Keith


Campbell, Menzies (Fife NE)
Miller, Sir Hal


Carlisle, Kenneth (Lincoln)
Mitchell, Andrew (Gedling)


Chapman, Sydney
Monro, Sir Hector


Coombs, Simon (Swindon)
Patnick, Irvine


Currie, Mrs Edwina
Pawsey, James


Dorrell, Stephen
Riddick, Graham


Emery, Sir Peter
Ryder, Richard


Evennett, David
Shaw, David (Dover)


Fenner, Dame Peggy
Shaw, Sir Michael (Scarb')


Fookes, Dame Janet
Shephard, Mrs G. (Norfolk SW)


Fry, Peter
Shepherd, Colin (Hereford)


Gow, Ian
Steel, Rt Hon Sir David


Green way, Harry (Ealing N)
Stewart, Allan (Eastwood)


Hague, William
Summerson, Hugo


Hargreaves, Ken (Hyndburn)
Taylor, John M (Solihull)


Harris, David
Thorne, Neil


Hayes, Jerry
Thurnham, Peter


Heathcoat-Amory, David
Tredinnick, David


Irvine, Michael
Waddington, Rt Hon David


Jack, Michael
Wallace, James


Janman, Tim
Wheeler, Sir John


Johnston, Sir Russell



Jones, Gwilym (Cardiff N)
Tellers for the Noes:


Jones, Robert B (Herts W)
Mr. Tim Boswell and Mr. David Amess.


Jopling, Rt Hon Michael



Kilfedder, James

Question accordingly negatived.

Adelphi Estate Bill (By Order)

Order for Second Reading read.

Motion made, and Question proposed, That the Bill be now read a Second time.—[Sir John Wheeler.]

Mr. Bob Cryer: The Bill has apparently been taken on the nod, but I am interested in the repeal of certain statutory restrictions upon the development of land on the north side of the river Thames, between Westminster bridge and Blackfriars bridge. The House is owed an explanation before we pass the Bill on the nod.
I realise that this is the Third Reading and that there have been preceding stages——

Madam Deputy Speaker (Miss Betty Boothroyd): Second Reading.

Mr. Cryer: There may have been a preceding stage. You read the Question mellifluously, Madam Deputy Speaker. I misheard "second" for "third".
On Second Reading, it behoves the House to have an explanation. I am sure that my hon. Friends, with their desire for keen scrutiny and examination, would want a brief explanation from the Bill's promoter, the hon. Member for Westminster, North (Sir J. Wheeler). I am not asking for a debate lasting an hour and a half, but it would be handy to have an outline of the legislation.
The passage of legislation such as this is recorded in Hansard. People who may be affected by the Bill will wish to read that. If the Bill is pushed through on the nod, people may consider that to be a contemptuous way in which to treat a Bill which is so nicely set out and which affects people.
Therefore, I hope that the Bill's sponsor will give us an explanation. I see him leaning forward in his place with an air of eager confidence ready to share his thoughts with us.

Sir John Wheeler: I am delighted to address the House on this modest little measure. If hon. Members wish me to take considerable time, I shall be delighted to assist them therewith. I could begin with a recital of history going back to the reign of our late sovereign King George III, when legislation was passed in 1771 to enclose part of the embankment adjacent to the river Thames, resulting in that delightful piece of property now known as the Adelphi, but I apprehend, Madam Deputy Speaker, that the House will wish me to leap from 1771 to 1990.
I shall therefore discuss the modest nature of the Bill. Its sole purpose is to repeal three Acts of Parliament dating back to 1771. One provision which remains unspent from those three Acts is section 34 of the Adelphi Estate Act 1933, which restricts the height of buildings on the estate. The proposed repeal in the Bill before us is of that provision, which would leave any proposal to raise the height of buildings to the planning committee of the local authority, in this case the council of the City of Westminster, rather than to Parliament.
I know that the House does not like to authorise works and planning consent through small, private planning Bills, but in this instance all the Bill would do would be to transfer the responsibility to the planning authority. I

understand that the promoters of the Bill have already made planning application to it, so that is a matter for the planning committee to decide.
That is the nature of the Bill. I have nothing further to say about it.

Mr. Cryer: Can the hon. Gentleman tell us what the reason was for the restriction on height? Was it an aesthetic reason? Is the Bill proposed in order to enable the development of ugly skyscrapers and multi-rise blocks?

Sir John Wheeler: I am grateful to the hon. Gentleman. I cannot engage upon a debate this evening as to the character of any extension. All I can say is that, in the City of Westminster, the beauty of the buildings is of great concern to the planning committee. No doubt it would wish to take those factors into account.

Mr. Peter L. Pike: The hon. Member for Westminster, North (Sir J. Wheeler) has not given us much to go on. I have grave concern about why we should want to remove the protection on height and give power to Westminster city council, when we are all aware of the record of that council. While one might be prepared to repeal old Acts if other authorities were involved, one looks at the Bill suspiciously and with grave doubt when it covers Westminster city council.
The hon. Gentleman did not identify the area of the site, how important it is and the implications of altering the skyline and allowing development to take place. He said in response to my hon. Friend the Member for Bradford, South (Mr. Cryer) that there are fine buildings of character in Westminster; he is not referring to some of the buildings which many of us see, because some appalling developments have been approved by Westminster city council. If we are to judge them by the criteria which Westminster city council has used in recent years, I am doubtful about the Bill.

Mr. Cryer: As my hon. Friend pointed out, I sought further information, which I did not get. The Bill refers to buildings
which may be erected, built or piled upon the said lands".
As the site is on the side of a river, there may be reasonable engineering reasons for limiting the weight of buildings. Behind the Bill may lie the complete removal of existing buildings to allow deep piling, using modern engineering techniques, and the construction of buildings which are out of character and different from the existing buildings.

Mr. Pike: My hon. Friend makes an obviously valid point. In the days before we had planning legislation, which was introduced by the Labour Government soon after the war, there were many calculated and deliberate ways to control development. The legislation that this Bill seeks to repeal is one such example.
I know that, in the case of my own house, the development was planned in Victorian times, when it was laid down that the house to be built should have a rentable value of not less than £72 a year, and at that time that determined the character of the building. I forget what year the hon. Gentleman said that this legislation dated from, but it was certainly some years ago, long before we had planning Acts, and it was intended to control the type


of development on this important site, adjacent to the river. Many people may feel that that legislation is the best way to contain developments, and it may well be.
If one considers what we have allowed to happen to the riverside—the river Thames which runs through the capital of this country—then I think that in many cases we should be ashamed of the developments that have taken place along it.
The Under-Secretary of State for the Environment is sitting on the Front Bench. I know that Government buildings are controlled in a different way, but I have to say that Government buildings, and even the Department of the Environment's building in Marsham street, are no credit to the skyline of Westminster, because they are disgraceful developments.
The hon. Member for Westminster, North needs to give us more insight if we are to be persuaded to allow the Bill to make further progress. I recognise that the Bill is at an early stage, but it is likely to suffer a stormy passage unless we get more assurances about why it is sought——

Mr. Cryer: Would my hon. Friend care to comment on the way in which my inquiries seeking further information have been dealt with? They were left entirely with Westminster planning committee. This House, which gives consideration to primary legislation, is being treated with contempt, because we are not allowed any sort of information about what lies behind this very expensive, if it is adopted, private legislation.
Does my hon. Friend not think that we should have at least the same sort of information that is submitted to the local authority planning committee?

Mr. Pike: My hon. Friend makes a valid point. I would have expected the hon. Member for Westminster, North to make a longer speech to convince the House why this should happen. We all know of the events within Westminster council—one does not know whether the planning committee has a better reputation. Other aspects of the council, such as Westminster cemeteries, give cause for grave concern in the Chamber tonight.
When I came into the Chamber, I was not aware of the implications of the Bill. I expected the hon. Member for Westminster, North to explain why the House should consider the measure. However, he had to be pressed to make any comment at all. He merely moved the Second Reading formally; it was only when my hon. Friend the Member for Bradford, South pressed him that he made any statement—it must have been one of the shortest speeches in support of a Second Reading that I have ever heard.

Mr. Harry Barnes: Should the hon. Member for Westminster, North not have explained to us in greater detail the nature of the 1771, 1933 and 1938 legislation? I know that it is up to hon. Members to have gone to the Library and sought the information. For instance, the Adelphi Estate Act refers to various types of buildings which are appropriate, but we have not been informed what they are. In the absence of having been able to find out the details of the legislation, we have an hon. Member in the House who is involved and who should be explaining matters to us so that we can make a reasonably mature judgment.

Mr. Pike: Indeed. I understand that certain provisions in the 1771 Act are to be removed, leaving no control over

the height of buildings other than what is considered appropriate by Westminster council. That is worrying. In theory, a building could be erected high enough to beat the Shell building or the NatWest tower, which might be entirely inappropriate to the site on which it was built. Of course we are keen on developments where they are needed, if they improve London as a tourist attraction and the capital of a major nation, but the hon. Member for Westminster, North has not convinced me that that will happen.

Mr. Nigel Spearing: My hon. Friend has reminded me of what I believe to be historical fact—perhaps the hon. Member for Westminster, North (Sir J. Wheeler) could confirm this. I believe that, in the 1920s or 1930s, some altercation took place about this very site. I seem to recall an historic building being demolished to make way for the existing building, which is neither unusual nor impressive.
My hon. Friend mentioned the NatWest tower. I also seem to remember some controversy about a "green giant" that was to be built not far upstream from the Houses of Parliament. Can the hon. Member for Westminster, North reassure us that the Bill would not permit such a development?

Mr. Pike: It is indeed possible that the council could, under the Bill, approve a development similar to the "green giant", which I believe was to be built on the opposite bank. A good deal of anxiety was expressed at the time. I think most people would agree that we have failed to take advantage of most of our post-war opportunities to develop and improve London's Thames banks. A possible exception is some of the original south bank development, but in general we have failed to make the river into a focal point for the people of London and the country as a whole, as well as visiting tourists. It is different in Paris: no such desecration of the river Seine has been permitted.

Mr. Cryer: My hon. Friend has considerable experience of local government, having been a council leader. What standard of information would he have expected Burnley council to present if it were seeking opportunities for development through the repeal of existing restrictions? Surely, as leader of a local authority, he would have given Parliament much more information than we have been given in justification of the Bill.

Mr. Pike: My hon. Friend is absolutely right. If Burnley council were promoting such a measure, it would have provided a detailed information pack, explaining not only the development that it envisaged but why it envisaged it.
I did not intend to speak for very long. I hope that the: hon. Member for Westminster, North will give us more positive reasons for supporting the Bill: if he is unable to do so, he will find himself struggling to get the Bill through, although it may be given a Second Reading tonight—and that is still in question.

Mr. Cryer: It is important that my hon. Friend should dwell on his local government experience. There is an important parallel to be drawn. It may seem trivial in comparison, but the local borough in my hon. Friend's constituency has developed the verges of the Leeds and Liverpool canal in a way that is attractive and pleasing to the eye. It has taken time, patience and careful consideration to provide a view of the waterside that is


pleasing to the inhabitants of Burnley. I should like my hon. Friend to elaborate on why we should not insist on being given information——

Madam Deputy Speaker: Order. I am sure that the hon. Member for Burnley (Mr. Pike) could elaborate on Burnley's virtues—but not tonight, and not on this Bill.

Mr. Pike: I shall not allow my hon. Friend to lead me astray. However, Burnley has done that. It has put together a very good proposal, with Lancashire county council.
I came here in order to hear what the hon. Member for Westminster, North had to say about the Bill. I saw that it had been set down on the Order Paper. I wanted to find out exactly what it entailed. It is an important site. It is next to a major river, the river Thames, in our capital city. Parliament should ensure that the site is safeguarded. We must not allow it to be desecrated. If we do not provide adequate safeguards, future generations will blame not Westminster city council but this House and the hon. Member for Westminster, North.

Mr. Hugo Summerson: Opposition Members have had a go at the Bill off the cuff. I did not see any of them look at the Bill, or at the promoters' statement. I have at least read the Bill and the statement.
Opposition Members referred to piling in connection with the redevelopment at the site. Paragraph 8 of the statement says:
The Promoters of the Bill own the Adelphi building and wish to enlarge and improve it by adding two storeys to it.
I am a chartered surveyor. If additional storeys are added to a building, that increases the load on the foundations. No one in his right mind would increase the load on the foundations of an existing building without looking at them to make sure that they are up to carrying the additional load.
According to the promoters' statement, they want to add only two storeys. The Adelphi is a large building that was constructed in 1933. I notice that the plans have been approved by the Royal Fine Art Commission and English Heritage.

Mr. Pike: Can the hon. Gentleman give the House an absolute assurance that, if the Bill is passed as it stands, it will not be just a sweetener and that as soon as the matter is in the hands of Westminster city council a different proposal will not be made? That is what happened with Battersea power station.

Mr. Summerson: The hon. Gentleman believes that I have rather more influence than I enjoy. I have no influence over either Westminster city council or the future of the Adelphi building. The hon. Gentleman said that this is a great city. Nothing can stand still; full use must be made of the building.
The promoters' statement refers to the 1771 Act which
authorised the Adam brothers and other owners of land adjacent to the River Thames to inclose and embank a stretch of the River".
When estates were laid out and developed in those days, the buildings were not designed to last for two centuries. Normally the freeholders granted ground leases for a certain term, so the buildings were not designed to last any

longer than the leases. After all, who would design a building to last 200 years when the lease for the building is for only 50 years?
On many occasions I have rung up the district surveyor about buildings which now stand in conservation areas to ask about the condition of houses in a particular street on behalf of a client—that was before I was elected to Parliament. The first thing he said was, "They are falling down." That puts one on notice. When one examines the building, one finds all the usual defects associated with houses of that age and type—bulging brickwork, sagging roof timbers and evidence that the foundations have settled.

Mr. Cryer: Is the hon. Gentleman suggesting that that applies to that building? I cannot recall it in the promoters' statement. The hon. Gentleman may be making a general case that has considerable merit, but we are talking about one building and I must ask him to distinguish between general observations and the condition of the building.

Mr. Summerson: I am glad that the hon. Gentleman made that point. A building erected in 1933 would have been far more substantial than any houses the Adam brothers ever built because its construction is far more sophisticated. It should be well able to sustain the additional two-storey load that the promoters are suggesting.
It seems to me that there is nothing hidden within the Bill to cause alarm and despondency to the Opposition. It seems a perfectly reasonable proposition and I very much hope that the House will give it a Second Reading.

Mr. Harry Barnes: The House should know what the Bill is doing. I do not think that the hon. Member for Westminster, North (Sir J. Wheeler) explained it to us in terms of the legislation which is being replaced. The Bill and the promoters' statement show us what the Bill intends to do, but that depends on what it intends to sweep aside.
I have managed to obtain copies of the Adelphi Estate Acts 1933 and 1938. I do not yet have the original Act of 1771 because, like my hon. Friend the Member for Burnley (Mr. Pike), who became interested in the debate as he heard it developing, I am a hangover from a previous debate. Had not my hon. Friend the Member for Bradford, South (Mr. Cryer) encouraged the hon. Member for Westminster, North to explain the Bill a little, we would have passed it on the nod in an entirely blind fashion.
The Adelphi Estate Act 1933 is a considerable piece of legislation with 38 clauses and 40 pages. The 1938 Act is a smaller amending measure, but the details of the Adelphi estate in the 1933 Act cover many wider considerations.

Mr. Cryer: My hon. Friend is saying that an entire 40-page Act is to be repealed by this measure without any list in the schedule of repeals of the ground covered by the repeals. That is not uncommon where repeals are carried out by public Acts. The hon. Member for Westminster, North (Sir J. Wheeler) has given us no explanation of the extent of the repeals.

Mr. Barnes: I am trying to get the hon. Member for Westminster, North to explain the details of the Bill. It seems that we must refer to previous legislation to flush him out.
The 1933 Act is wide ranging. It amends the 1771 legislation and refers to the Adelphi foreground and the ability to build thereon. The 1771 Act is in the cellar, but the Library is trying to unearth it. When it does so, we shall find that sections 3 and 4 have been repealed by the 1933 Act.

Mr. Cryer: I am grateful for that information. Is my hon. Friend telling the House that the promoter has not placed the 1771 legislation in the Vote Office so that the best possible information is available to hon. Members? I should like my hon. Friend to elaborate on that and to explain how difficult it is to obtain such information.

Mr. Barnes: The short notice that hon. Members are given of private Bills makes it difficult for them to obtain information from the Vote Office. I obtained my information from the Library, where a young man who has a broken arm had to climb a ladder to dig out the two Acts. A search party is trying to find the 1771 Act. We should keep debating the Bill until that Act is before us. It would be monstrous if we did not know what the amending legislation was based on.
We wish to know which of the provisions of the 1933 Act will be repealed by the Bill. For instance, the Act contains powers on street works and various subsidiary works. It mentions the underpinning of houses near to street works, the power to divert in various areas and easement, for which councils and planning authorities are normally responsible.

Mr. Cryer: My hon. Friend mentioned street works. Something rather more widespread may be involved in the Bill than appears on the surface—the handing over of obligations under existing legislation to Westminster city council, which will remove burdens from the developer, who can then zoom ahead to better, cleaner and purer profits.

Mr. Barnes: That is possible, but we do not really know. The 1933 Act refers to the extinction of private rights of way over land. As that Act will be swept aside, will the Bill reinstate those provisions, and will responsibilities under the 1933 legislation be taken over by Westminster city council?
Other provisions in the 1933 Act affect different authorities. It refers to the London Electric Supply Corporation Limited and Charing Cross. There are similar measures concerning the Gas, Light and Coke Company. Obviously, there have been vast changes in legislation which have moved some matters into the public sector and others out of the public sector. Specific measures are contained within the 1933 Act which refer to such matters. The 1933 Act refers, for example, to the Commissioner of Police in connection with the Adelphi building. We must consider a wide range of measures affecting arrangements in the area and the Victoria Embankment, yet I have only recently been able to glance at the earlier Acts. Why do we not have a similar Bill now for the Adelphi estate? Why is it such a limited and short document when it is dealing with a wide range of measures?
We have at last received the 1771 Act direct from the cellars of the House of Commons Library. The Bill dates from the reign of George III and it is a substantial document.

Mr. Cryer: On a point of order, Madam Deputy Speaker. Would it not be preferable to adjourn the House for 10 minutes while my hon. Friend looked at the Ace?

Madam Deputy Speaker: The hon. Member for Derbyshire, North-East (Mr. Barnes) could have looked at the Act earlier today. He knew that this debate was taking place tonight.

Mr. Summerson: Further to that point of order., Madam Deputy Speaker. Would you kindly ask the hon. Member for Derbyshire, North-East (Mr. Barnes) to treat that aged volume with great respect?

Madam Deputy Speaker: I shall happily do so. Volumes. that are available to the House of Commons should be dealt with very gently. They are very beautiful books. I hope that the hon. Gentleman will see that the book is returned to the Library at the earliest time.

Mr. Barnes: I shall certainly treat the book with great respect, Madam Deputy Speaker. I hope that the House will treat with great respect this legislation and that contained within other volumes. The House should not pass the Bill in a half-hearted manner and without detailed consideration. This document is important not only as an historic relic, which the Bill seeks to make it, but as a living piece of legislation, which has been amended by the 1933 and 1938 Acts. It is the law at present and will still be the law even if the Bill is given a Second Reading. It will remain the law until other due processes have been gone through. We need to adjourn for some time to study the 1771 Act.

Madam Deputy Speaker: Order. I hope that the hon. Gentleman will not lick his fingers again in that way when turning over the pages. He is dealing with very precious volumes.

Mr. Barnes: Apart from having some difficulty in seeing the words, I find that the Act is not written in standard English. It is a creature of the reign of George III. We need to find someone who understands such literature. We need more than merely to collect a copy of this precious document—which I presume is the only such document in the country—from the Vote Office.

Mr. Pike: Would it assist the progress of the House if Westminster city council, the promoters, and other interested parties were to transcribe the 1771 Act into a modern form so that all hon. Members who may debate this important Bill at a later stage can have copies of the document without having to borrow this book and thus risk damaging it?

Mr. Barnes: It really is quite unacceptable that I should have to stand here holding the original in order that I might take part in this debate. Indeed, I am worried about how I should handle it.

Mr. Cryer: Does my hon. Friend agree that it would be ideal if we had the same procedure as is adopted in dealing with public legislation? When there is a proposal to repeal three Acts of Parliament we should be able to go to the Vote Office and collect the relevant documents. We should


be provided with a summary of each clause that is to be repealed. In addition, there should be a translation into modern English of the wording of the 1770 Act. In the ordinary course of events, Members can go to the Vote Office half an hour or an hour before a debate takes place to get the necessary documents.

Mr. Barnes: That is exactly what is required. We should have been provided with copies of the actual legislation. Anything else is an interpretation. An interpretation of the 1777 Act is necessary, but we should have been provided with copies of the other two Acts, which are much more modern. We should also have been provided with documentation relating to the Bill under consideration so that we might relate it to those pieces of legislation.
Bodies seeking to promote legislation in this House should have such an obligation. If procedures such as those to which we are being subjected in respect of this Bill were adopted in respect of public legislation, we should object strongly. Actually, we have a right to object to the form of some of the public Bills that come before us. It is often difficult to get to grips with the wording of clauses and of amendments. However, we at least have an opportunity to examine documents relating to public legislation to get an idea of the nature of its provisions. If there were an opportunity of that kind in cases such as this, Members who intended taking part in a debate could then equip themselves with information. But so could Members who happened to turn up and began to take an interest. All Members, in the course of the debate, would have an opportunity to decide what position to take.
We now have before us—no, I have before me—three Acts. My hon. Friend the Member for Bradford, South is able to examine them because he happens to be sitting beside me. I have had no opportunity to study this precious document, which must be returned to the Library, or the other two Acts. It would be beneficial to

adjourn or to move on from this stage without making any decision on Second Reading. That would give us an opportunity to examine these measures in detail. Having done so, we might decide that there was nothing wrong with this Bill, and that there was nothing to worry about. But that is not the point. The point is that, as legislators, we are supposed to scrutinise documents and information carefully. If we do not, we will not be in a position to discharge our duties properly. I should think that our constituents would expect that to be normal procedure in this House.

Mr. Cryer: I draw my hon. Friend's attention to the Adelphi Estate Act 1938, which states:
No building shall at any time be erected within the limits of deviation shown on the deposited plans of a greater height than 145·64 feet above Ordnance datum measured to the top of the roof of such building but excluding the chimneys thereof.
Surely those words suggest that that was a very important aesthetic consideration in 1938. It might be regarded as important today, yet the promoters have not explained the importance or relevance of adding two storeys to an existing structure.

Mr. Barnes: When similar measures are before us, the plans associated with them are often available for examination in the Private Bill Office. The matters to which the Bill refers are matters that we should have the opportunity to examine. We should be able to go to the Vote Office to get the basic information and then find specific items elsewhere in the House. If we saw the plans and information and were reminded of the aesthetic considerations at stake, we might decide to move down the embankment——

It being Ten o'clock, the debate stood adjourned.

Debate to be resumed on Thursday 1 March.

Madam Deputy Speaker: Before we move on, may I ask those hon. Members who have precious volumes belonging to the House to return them to the archives?

European Community (Fraud)

Postponed proceeding on Question,That this House takes note of the Annual Report of the Court of Auditors of the European Communities for 1988 and European Community Document No. 4582/90 relating to action against fraud; and approves the Government's efforts to press for value for money from Community expenditure, resumed.

10 pm

The Economic Secretary to the Treasury (Mr. Richard Ryder): If the House had been fuller, I should have been tempted to repeat my 25-minute speech to refresh hon. Members' memories on the important points that I have made to date. Instead, I shall leave hon. Members to read my remarks in Hansard and I shall draw my own observations to a close as I see the hon. Member for Newham, South (Mr. Spearing), who has been waiting patiently to speak, as has the hon. Member for Islington, South and Finsbury (Mr. Smith).
The Court of Auditors names the United Kingdom as one of the member states in which transport infrastructure moneys have merely subsidised projects that would have gone ahead anyway. We reject that accusation. We also think that the court has exceeded its remit in suggesting that the transport infrastructure fund might be treated differently within the budget. While we recognise the valuable work of the court, we believe that it should confine its remarks to the remit that it has been given—namely, to questions of implementation and effectiveness. It is important that Community institutions should concentrate on carrying out their specific functions properly. rather than attempting other tasks outside the scope of their responsibilities.
The Court of Auditors regards the role of the financial controller—covering both formal executive powers on the one hand and powers of inspection, opinion and advice on the other—as ill defined. We agree that it is important to clarify the responsibilities of the financial controller. The new financial regulation—introduced at our instigation—will provide a more precise definition of those responsibilities.
The new financial regulation is another example of Britain's determination to get results in this matter. It sets out the rules for implementing the Community budget. We have succeeded in getting the rules redefined to improve the framework for sounder financial management. In effect, the regulation introduces the basic principle of financial management initiative. The package of changes in the regulation is long overdue.
I must re-emphasise the results of our efforts during the past year. The basis for systematic reporting of frauds in all the main areas of revenue and expenditure has been laid. We shall now have a much better basis for judging whether those member states that report little or no fraud are bastions of lawfulness or havens of maladministration. Numerous control systems have been tightened. For example, under new rules for the post-payment audit of common agricultural policy transactions, the minimum number of checks by member states of the books of major firms and trades will increase by 40 per cent. on average.
We have started to simplify existing rules and regulations to ensure that regimes can be properly policed and audited. For example, last year's report of the Court of Auditors noted that special controls were necessary in

respect of meat from adult male cattle. The number of refund categories applying to such meat has been significantly reduced over the past year. We have introduced tighter financial management, the new framework which reflects United Kingdom experience in this area over the past decade. Above all, we have kept fraud at the forefront of the European agenda and have been greatly assisted in that task by the support and encouragement of hon. Members.

Mr. Chris Smith: I open with my perennial complaint about the ability and opportunities of the House properly to scrutinise European Community activities and our Ministers' conduct within the European Community structures. Usually, we have a debate of only one and a half hours, which starts at 10 pm. That was true of the debate some weeks ago on the European Community budget for the forthcoming year.
Today, we have had a variation of that phenomenon. We have had a bifurcated debate. As usual, it was truncated, but it was also split into two parts. It must be unsatisfactory for the Minister's opening speech, which is important in setting the framework for the debate, to be interrupted by three hours of discussion on a private Bill and taken up again at this hour of night. In the near future, we must find a better way to address European Community budgetary issues as the House should address them, and more effectively.
I must confess that the Treasury memoranda issued along with the Community documents are improving somewhat. The memorandum of 4 December 1989 was at least intelligible, if somewhat bland. But attached to it was a completely illegible copy of a Commission document. The presentation of Treasury memoranda still needs to be improved to a certain extent.
We have before us the Court of Auditors report for 1988. The court undertakes a broad and detailed scrutiny of a wide range of Community activities. It considers not only the probity of the use of Community funds—I shall come to that when I concentrate on fraud—but the efficiency with which funds are used. They have some useful insights to offer about the efficiency or otherwise with which Community funds are put to use.
I cite one example—that of industrial support within the regional policy of the Community. The report devotes several pages to industrial support, which is a crucial issue for the United Kingdom economy. As hon. Members will know, the investment performance of the United Kingdom economy during the past 10 years has been far below that of our competitors. It would be useful to consider carefully the way in which European Community funds within the regional policy have been used to support industry in Britain.
I am pleased that the report reveals that the United Kingdom has done a little better than most of the Community countries in the proportion of regional funds that it devotes to industrial support. In Britain, the figure is a bit more that 20 per cent. However, that compares poorly with West Germany, which has consistently exceeded the desired percentage of support—30 per cent.—suggested by the Commission for member countries, because Germany has used 56 per cent. of its regional funds to support its industry. Therefore, although we are


doing reasonably well in terms of our position on that scale, we are still not achieving either the desired objective or the performance of the best performing economy of the European Community.
It is also instructive to note in the section of the Court of Auditors' report on industrial support that the proportion of projects that were initially agreed for support but subsequently abandoned was 22 per cent. Surely that should give us some pause for thought in wondering whether the initial assessment is being carried out accurately or well enough.
It is also worth noting that the Commission's report highlights the fact that the creation of new enterprise, as opposed to the extension of existing enterprises, forms a small portion of the industrial support coming from European Community funds.
The Court of Auditors' report also draws our attention to the fact that the proportion of goods that are supplied locally within the regions of the United Kingdom, and the proportion of services and sales that are made locally within the regions of the United Kingdom, is poor in relation to the overall support that has been given.
Those are extremely interesting and important issues. The Court of Auditors' report should provide us with much food for thought on issues such as investment in and support for industry in the regions of this country.

Mr. Anthony Beaumont-Dark: Does the fact that we keep using the expression "Court of Auditors" grate on the hon. Gentleman as much as it does on me? That is a fraud in itself, because a court has powers to act. It is not a court of auditors at all; it is a bunch of auditors who report to the Commission, all of whom are usually biased in favour of their own nation and so do damn all about it when the report is made, except to shove it under the carpet and to shove out their hands to get some more money with which they will carry out the same fraudulent practices. I wish that we could call it a commission, because that would not be quite as irritating as giving it the name of a "court".

Mr. Smith: I fear that I must advise the hon. Gentleman that "Court of Auditors" is precisely the title under which it goes.

Mr. Beaumont-Dark: I am well aware of that.

Mr. Smith: So, despite the hon. Gentleman's misgivings, we must give it that title when referring to it. The hon. Gentleman does a disservice to the work of the Court of Auditors. The documents that it produces are perhaps not perfect, but they are extremely valuable and give us a considerable insight into the way in which the substantial funds that are available to the European Community are used——

Mr. Beaumont-Dark: Or misappropriated.

Mr. Smith: Yes—as the hon. Gentleman has just remarked from a sedentary position, or misappropriated.
It is worth bearing in mind that our contribution to the Community budget is £7 billion in a full year and that the overall resources available to the European Community institutions are considerable. In monitoring what happens to that money, the work of the Court of Auditors is both valuable and, on the whole, extremely well carried out.
I shall turn to the reports that we have in front of us that relate to fraud, because that is the issue on which the Minister has concentrated and which is, I suspect, of most immediate interest to the House. It is worth noting—in this respect, the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) is again being unfair to the Court of Auditors—that action on fraud originated largely because of the comments made by the court in previous reports that it brought forward to Community countries.
It is also noticeable that the principal instances of fraud that are beginning to emerge and be looked at in detail relate especially to the agriculture regime. The Commission on the Fight Against Fraud found that there were no identifiable cases of fraud in relation to the use of regional funds, that cases of fraud in relation to the social fund were confined to one country in the Community, but that cases of fraud in relation to agriculture were more considerable.
The European Community budget is changing gradually—in my view, too gradually—from an over-preponderance of support for agriculture to support for the social and regional funds. That changing balance is to be welcomed and I suspect that one factor that will flow from it is a natural diminution in fraud. However, we must be as rigorous as possible in rooting out fraud as it presently exists. I must confess that, on this, the Government say quite the right things.
In their memorandum of 4 December, the Government say:
The Government has made clear the high priority which it attached to the fight against fraud and had indicated its readiness to consider any practical and cost-effective measures to this end.
That is absolutely right, and the Minister identified precisely that aim on behalf of the Government.
In their later memorandum of 6 February, the Government restate their objective:
The Government especially welcomes the fact that legislation has been presented in the two areas highlighted by the Court of Auditors, namely export refunds and intervention storage. Like the Commission, the Government believes that it is extremely important to maintain the political momentum of the fight against fraud; and to foster co-operation at all levels".
Those are exactly the right sentiments, and ones that the Opposition wholeheartedly endorse. We must ask whether the Government have yet done, or are doing, enough to put those sentiments into action.
There is one slight problem, which was touched on earlier in the debate by the hon. Member for Ludlow (Mr Gill). However efficient we are in looking at individual instances of fraud and particular types of fraud, due to the very nature of the agricultural support system, there will undoubtedly still be a possibility—indeed, a probability —that fraud will continue.
While we must seek to reduce those instances of fraud as much as possible, the principle of intervention tends to make the system capable of fraudulent use. That is one reason why we should continue our efforts to try to change the way in which agricultural support is organised in the European Community.
It is worth reminding ourselves of the nature of some fraud. Perhaps the best publicised example was the case in Leeds of a butcher named Jack Mercer, who was sent to prison in 1986 for a £465,000 meat fraud. He had developed a thriving business sending horse meat to southern Africa and claiming European Community refunds on the basis that it was prime beef.
The exporter was able to claim back in subsidy from the EC the difference between the prices at which he was selling the meat in Third-world countries and the prices at which it would have sold in the Community. Prosecuting counsel in the Mercer case said:
This was a fraud on the British taxpayer on a very large scale based on a very simple idea. They claimed to export boneless beef when what in fact was being exported ranged from chicken fat and horse meat to meat already rejected as unfit for human consumption. The meat was so poor that it could be shipped out for little more than 25p a box, but it was worth simultaneously a refund of £10 to £15 a box.
That is the sort of fraud we are discussing. It is not just a fraud against the British taxpayer but an insult to the eventual destination of the products which are then purveyed.
Another example is that of British sheep. Britain and France are currently being investigated after it has been identified that there is considerable scope for fraud in the subsidy scheme for sheep, which accounts for about £860 million a year. The payments that are made, of about £15 per animal, are uncheckable.
Farmers, it seems, can easily claim for dead animals or ewes past their prime, rather than for the pregnant ewes for which the money is supposed to be available. The investigation has so far revealed
a number of frauds of substance",
according to the findings of the Commission on the Fight Against Fraud. That is the sort of activity which the commission is trying to counter. When a Dutch Socialist tabled a question in the European Parliament on the subject, the answer revealed that an estimated 86 million ecu had been lost in refund fraud between 1972 and 1988. We are talking about large sums and particularly nasty instances of fraudulent claiming.
The commission on fraud is extremely worried about what has happened. So, to give them credit, are the British Government, and much of what the Minister said—about Her Majesty's Government being in the lead in trying to move forward with the so-called 45-point programme that the commission on fraud has set in train—was right.
Praise is due—it is rare for me to offer it—to the British Government for their robust endorsement of the alterations in the documentation required under the change to what is known as the annex 2 documents. The Commission on the Fight Against Fraud was extremely anxious to ensure that much tighter documentation was needed in order to prove that particular products had been exported from one country and imported by another.
The British Government were almost alone in the Community in pushing that issue and in ensuring that, in the end, although the original proposal was, sadly, watered down to a certain extent, better documentation than was previously required was insisted upon. The British Government deserve considerable credit for that. However, a number of questions are outstanding on which I would be grateful for ministerial confirmation.
First, the strength of the anti-fraud co-ordinating unit in Brussels is clearly inadequate for the task with which it is charged. The Minister referred to the fact that it now has 30 members of staff. Is that sufficient? Surely we ought to know by now that well-trained and competent investigators in such anti-fraud units pay for themselves many times over. It would be good to know what commitment the United Kingdom Government have made to

improving the effectiveness and increasing the strength of that unit, and what discussions the Government have embarked upon with their fellow member states to ensure that that happens.
Secondly, what specific steps do the Government intend to take to improve cross-border co-operation in the fight against fraud? For example, there is a proposal on the table that draft treaties on extradition and the transfer of criminal proceedings from one EC country to another should be brought forward. Will that happen? Will the Minister give a commitment that the British Government are keen to see such developments? The Select Committee on European Legislation, chaired so ably by my hon. Friend the Member for Newham, South (Mr. Spearing), specifically mentioned that in its report on the commission on fraud documents.
Thirdly, what specific proposals do the Government have for improving the inspection regime for sheep subsidy claims? That is an area where the British regime has been criticised by the commission on fraud, and it clearly needs to be improved.
Fourthly, the Minister brushed aside the Court of Auditors' anxiety about the way in which road and rail projects are financed when Community money is made available in Britain. The most obvious example is that of funds that are available from the EC being deducted from the funds that are available within the United Kingdom. The result, on a number of projects, is that the organisation constructing the project delays claiming the EC money so that it does not lose the British Government money that is available for the project. There is clearly a need to tighten up procedures here, and it would be good if the Government were somewhat less complacent about the criticisms that have been made about the British practice by the Court of Auditors.
Fifthly, the Court of Auditors has drawn attention to the fact that records on fraud are not kept in a uniform way from one EC country to another. There is not even agreement on what counts as an irregularity within the terms of the Community's provisions. In Britain, we interpret an irregularity as simply and solely a fraud, and it is filed under that heading. In other countries, it is not just fraud but errors that count as irregularities. Would it not be sensible to ensure a common parlance and a common standard throughout the Community? What are the Government doing to achieve that?
I should also like to know what provisions the Government are pressing for to ensure that the proposed bank for reconstruction and development, which is to assist the newly emerging democracies in eastern Europe, will be marked by the same probity that appears to exist in the operation of the regional and social funds in most Community countries. There must be proper scrutiny and proper safeguards in place for the bank similar to those being established for other aspects of the Community's budget.
In summary, the Government have the right aims to ensure that fraud is combated vigorously. The Court of Auditors, the Commission on the Fight against Fraud and the Government have made a good start on combating


some of the more obvious and worrying cases of fraud, but there is a long way still to go and a lot still to be done. It would be good if we had further commitments from the

Government, straight answers to the questions which we have put to them and a determination to ensure that the fight against fraud is taken further and that fine words issue into sensible and worthwhile actions. A start has been made, but much still needs to be done.

Mr. Christopher Gill: In the debate on the report of the Court of Auditors this time last year the Minister, my right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke), said that fraud was endemic in many states in the European Community. The hon. Member for Islington, South and Finsbury (Mr. Smith) has pointed out that the United Kingdom is not entirely blameless in this regard.
There is a catalogue of evidence that fraud exists. European Members of Parliament, giving evidence to the Foreign Affairs Committee last November, stated that the European Parliament was powerless to stop it. The European Association of Agricultural Law estimated that the cost of fraud was about £3 billion per year, although press reports suggest that it may be between £2 billion and £6 billion per year. There were reports of 1,000 Sicilian livestock breeders being involved with local officials in defrauding the Community of 2 billion lire in subsidies.
My hon. Friend the Minister will be aware of my view that in many instances we are dealing with the effect and not with the cause—that it is the system which is at fault in that it creates a situation in which people are tempted to indulge in fraudulent practices. As the hon. Member for Islington, South and Finsbury pointed out, the preponderance of fraud is in agricultural products. I believe that that problem will never be solved because of the commodities which are involved.
We have to ask ourselves how a system of export refunds and intervention payments benefits the consumer. The answer, I suggest, is not at all. How does it benefit the primary producer? Again, I have to say that in my view the answer is, directly, not at all. If consumers actually understood the system, would they support it? I believe that it is very doubtful that they would. So who benefits from a system which allows such fraud? The answer is that only the commodity brokers, the fraudsters and swindlers benefit.
Enough has been said about fraud, so I will deal now with the Court of Auditors report. It is difficult to take exception to the conclusions contained in the report, which makes fascinating reading, and I commend it to people outside the House because they would learn an enormous amount from it.
On page 12 and again on page 49 of the report, the conclusion is that
it is clear that the Commission's administration and control over own resources needs to be considerably strengthened so that the budgetary authority can have reasonable assurance that the Communities' own resources are properly established, collected and accounted for.
That is an indictment that the House cannot afford to ignore. If we ignore it, there is no point in having a Court of Auditors report. I remind the House of the undertaking given to the House on 14 March 1989 that the United Kingdom Government would follow up the Court of Auditors report.
There is no doubt that the European Community must be brought to book. It deals with a large budget, and from what we read and what we know from previous reports, its accounting systems are poor and leave a great deal to be desired.

Mr. Charles Wardle: Does my hon. Friend agree that the Court of Auditors report would be more effective if it was produced sooner than 11 months

after the financial year ends? Does it not make it even more difficult to bring the Community to book if it takes 11 months before the report is published and 14 months before the House can consider it?

Mr. Gill: My hon. Friend makes a good point. I am not unaware of his considerable experience in commerce. I was about to invite the House to consider contrasting the report, the scale of the budget and the deficiencies outlined in it with the reaction that there would be in a commercial organisation to receiving such a report from its professional auditors. I suggest that the Government would be failing in their responsibilities if they did not take note of the report, although, as my hon. Friend has said, it is regrettable that we are today considering the report for 1988 rather than for 1989.
We know that the European Community has an almost insatiable appetite for cash, and some hon. Members feel that some of the schemes on which the cash is spent would not pass muster in our national Parliament. Ministers must therefore make better efforts to ensure that we get satisfaction and that the report is not just noted but acted upon.
I am sometimes amazed at the reaction of hon. Members when we talk about European Community expenditure. I agreed with most of what the hon. Member for Islington, South and Finsbury said. At one stage, he contrasted the proportion of European regional development fund money spent in Germany on industrial projects with the proportion spent on industrial projects in this country. I invite him to consider whether it would not be better in terms of improving the long-term prospects of the British economy and of British industry if all the funds were spent on infrastructure rather than being allocated to specific industrial concerns. Not only industry but everyone living in this land could benefit from that. Surely increasing emphasis should be placed on projects which benefit every taxpayer in the land, rather than the Government—or the European Community—trying to pick commercial winners.

Mr. Chris Smith: It would indeed be sensible for a substantial amount of Community money to be spent on infrastructure projects. Spain and Portugal, for instance, have spent virtually all their regional fund allocations on such projects. However, so long as it remains the British Goverment's practice to assume that infrastructure money from the Community means a reduction in such money from the Government, such a move would not be entirely good for the overall health of the British economy.

Mr. Gill: I am not sure that I entirely agree. The hon. Gentleman and I perhaps view such matters from different philosophical standpoints.
As I have said several times before, I find two things unacceptable—the cost of Community administration, and the tax churning. We remit our taxes to the Revenue in Whitehall, which in turn remits money to the Community in Brussels, where administration costs are incurred before the money is reallocated to this country. Surely many of the projects currently benefiting from Community money would be better served if we kept the money here in the first place. We are always hearing that this or that project would not have gone ahead without European funds, but where did those funds come from


originally? The European Community, like our own Government, has no money other than that which it collects from taxpayers.
The report is full of criticism of the administrative and accounting systems and controls in Brussels and calls into question the administration arrangements generally. Surely we could have a perfectly adequate European Community without structural funds. In the context of what is now unfolding in Europe, it might even be preferable. Would not forging links with eastern European countries struggling to establish industries and democracy be easier without such an irksome and complex system of administration?
I believe that we should be fully justified in demanding a root and branch improvement both in the performance and in the probity of the European Commission's financial affairs.

Mr. Nigel Spearing: The Minister and my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) referred to the bifurcated nature of the debate. As for the time available for the debate, it would not have been unreasonable had the debate on the Criminal Justice Bill lasted until 7 o'clock, for private business to fill the three hours between 7 and 10 o'clock and for this debate to start at 10 o'clock and to finish in three-quarters of an hour. Our time will be constrained if every hon. Member who wishes to take part in the debate does so and if we hear a proper reply by 11.30. This year the Government have allowed only one and a half hours for the debate. On 2 March 1989 three hours were made available for it. In terms of a time audit, we have gone backwards.
Money lies at the root of the power of this House. Rightly or wrongly, by means of various Divisions some hon. Members have thought it fit that taxpayers' money should be spent by the European Community. Whether or not that is desirable, all hon. Members agree that that money must be properly audited.
By what means do we exercise control? Ministers can exert influence over the conditions that the Council of Ministers places upon what is called the discharge of the accounts. I shall read into the record article 206B of the treaty of Rome. It says:
The European Parliament, acting on a recommendation from the Council which shall act by a qualified majority, shall give a discharge to the Commission in respect of the implementation of the budget. To this end, the Council and the European Parliament in turn shall examine the accounts and the financial statement referred to in Article 205A and the annual report by the Court of Auditors together with the replies of the institutions under audit to the observations of the Court of Auditors.
Our aim, therefore, must be to ensure that when the Minister goes to the next meeting of the Council of Ministers he asks it to consider the Court of Auditors report and to make recommendations to the European Parliament, which will then have power to give a discharge. According to my reading of the article, the European Parliament need not discharge the accounts. It would need to be given reasons for not discharging them. If the Council of Ministers, by a qualified majority, gave the European Parliament such a reason, that would be possible. I place that on record because the House still has

the power to influence events. However, the key to what happens is the Council of Ministers. I hope that the Minister will be influenced by what we say.
I intend to refer to what happened a year ago and follow up what was said in last year's debate. On that occasion, an amendment was tabled by Her Majesty's Opposition that tried to beef up the Minister's response in the Council of Ministers' meeting on 13 March 1989. The Opposition amendment said:
and to this end calls on Her Majesty's Government to withhold their approval of any recommendation by the Council of Ministers of the European Economic Community to the European Parliament to discharge the annual accounts of the Community for the year 1987, in accordance with the procedures specified in Article 206B of the Treaty of Rome, until the Council has received and discussed the report of the working party established by the Commission of the European Communities to consider the recommendations of the Special Report No. 5/88 of the Court of Auditors (8502/88) dated 13 September 1988 on the management and control of public storage of agricultural products."—[Official Report, 2 March 1989; Vol. 148, c. 464.]
In other words, it asked the Minister not to approve the discharge until a working party had reported. That was a relatively mild amendment, but for reasons that were not made clear in the debate by the then Paymaster General, who we all respect and who is now carrying out a non-party job in Government administration, he resisted that amendment. My hon. Friends pressed it to a Division. I want to follow up what may appear to be verbal gobbledegook but was an extremely important amendment.
That was a debate on the annual Court of Auditors report. Its additional report 8502/88 dated 13 September 1988 on the management and control of public storage of agricultural products was a special report which I christened the Mart report after the president of the Audit board. The Government had every reason to pay attention to that report because during that and preceding debates the former Paymaster General coined the phrase "fraudster friendly". The way in which the accounts were kept, or not kept, invited fraud. We heard a graphic example from my hon. Friend the Member for Islington, South and Finsburgh (Mr. Smith) who referred to the case of the Leeds butcher.
The 1988 report contained plenty of material. I shall re-read one of its findings:
With regard to the operations financed by the Community resources in which the EIV
—the European Investment Bank—
is involved to varying extents, the Court is justified in fearing that, due to a lack of watchful action on the part of the Commission, its task as … external audit authority will gradually become meaningless if not impossible.
Has that position changed? Has anything happened in the intervening year which would vary that finding of the Audit board last year? If not, all that the Minister said about Commissions and more people has to be qualified.
I now wish to consider the way in which the Community has reacted—or not reacted—to the Mart report. In document 4582/90, the Commission set out at fair length what it has done. I presume that that document was a reaction to the Council meeting of 13 March 1989—the one to which the former Paymaster General hastened after the debate. The document reports on the operation of the new unit—UCLAF—and tells us its aims. It refers to the Council meeting of 13 March and, under the heading,


Historical context, political background and developments in 1989
states that UCLAF started with 10 people and has now increased to 30. It continues:
Fraud prevention was a major topic in 1989. Parliament held a public hearing on the subject in January and continued to show a special interest in fraud prevention activities throughout the year. On 13 April 1989 it adopted a resolution on fraud affecting the Community budget.
It then refers to Council meetings on 25 and 26 May 1989 and the European Council meeting at Madrid in June 1989. That report does not mention the Mart report, which was the subject of an amendment moved by the former Member for Vauxhall. It was subject to much discussion last year, but what has happened since? The audit board's important report drew attention to the fundamental flaws in the system for accounting within the EEC. It was not merely a qualified account—year after the year the accounts have been qualified—because it produced some recommendations.
Section 6 of the Mart report contained several headings, such as "Quantitative Control", "Qualitative Control", "Flat Rate Basis", "Year End Stock Valuation Methods and Depreciation" and "Conclusion on the Accounts." It said:
The conclusion that inevitably results from these findings is that it is technically impossible to arrive at any audit opinion whatever, on the view presented by the EAGGF budget accounts, of public storage expenditure.
I do not think that one could find a more qualified report than that.
The Mart report also contained paragraphs entitled "Overall Systems", "Overall Audit Organisation", "Preparation of Monthly Declarations", "Complexity of the Accounting System" and "An Alternative Accounting Method."
I hope that the Minister will say what happened—if he does not know, perhaps he will write to me—to the working party that was supposed to report on the action that will be taken by the Commission on the Mart report. Last year, my hon. Friends suggested that the Government should await its report before giving assent to the discharge of the accounts. The former Paymaster General did not say why that report should not be adopted, but it was not adopted, and there was no mention in the Commission's accounts of activity to prevent fraud. Further, there was no mention of the working party or its conclusions, still less of the Mart report itself. I hope that the Minister will clear up that rather startling omission from the Commission's accounts of its efforts to detect fraud.

Mr. Teddy Taylor: I want to say a few words about tobacco, but before doing so I must say to the Minister, and I hope that he will at least agree, that it is an insult to Parliament and to our democracy to hold this annual debate after 10 pm, when nobody will notice. It is an outrage that we are discussing the scandals, fraud and spending of the Commission more than a year after the report should have been prepared. That makes it clear that the Government believe that the House is useless and pointless in controlling or making recommendations on the EEC. At some stage, we must say that, with the mass of legislation from the EEC, The total lack of democratic

control and the desire, I am afraid, of the Government to ensure that people do not know what is going on, we are not doing a service to democracy.
Like previous reports, this one contains some juicy stories of fraud and scandals. It says that some member states are not paying their contributions, and two are mentioned in particular. We heard the interesting story that development funds are being used in a useless way.
However, the real problem of the report is that it tends to give the impression that something can be done about the scandals that are revealed. I believe that it cannot. There is not much opportunity to probe for a reduction in crime if all the back doors are left open. As my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) has so rightly said, it is pointless to set up new bureaucracies to examine fraud when the basis of fraud is available to every trickster, to every criminal and to every bright person who seeks to find a way of making some money out of it.
What worries me more is that, despite the report, there is a constant conspiracy to try to convince ourselves that problems have been solved. The new unit on fraud is a perfect example. Whenever the issue arises again, we shall be told, "Just wait until the new unit gets to work."
We have heard constant tales in Government reports responding to the auditors' reports about the sad situation of the Common Market tobacco industry. We have heard Ministers say—and it has been put to me—that the Commission showed years ago a welcome determination to tackle the costs of the tobacco regime. I was told that a new agricultural stabiliser had been introduced in the tobacco sector in 1988 and that savings of 9 million ecu had been secured. However, the plain fact is that, despite all the reports, the policies and the scandalous references in the reports of the Court of Auditors over the past six years, production of tobacco in Europe is again at an all-time high. We find that the subsidy of European tobacco is again at an all-time high—£813 million this year or, in European terms, 1,139 million ecu.
In that situation, it is an outrage to common sense that the Common Market is devoting an increased contribution to the "Europe Against Cancer" programme and, at the same time, we are spending over £1 million a week dumping high-tar cigarettes—which we are not permitted to smoke—in Africa, where, no doubt, the people are simply unaware of the specific dangers. There is nothing more shameful and shocking, and which makes us feel more sick than to have such a huge expenditure on producing tobacco, which is the highest subsidised item in the whole common agricultural policy, and to spend a fortune in exporting 149 million tonnes of it at the same time as we are spending a fortune on a massive programme to try to talk about the "Europe Against Cancer" proposals.
Sixty five per cent. of the Common Market harvest, which comes from seven members of the Community, is of the high-tar variety, which will shortly be almost wholly unlawful in the EEC. It is costing us a fortune to promote the growing of tobacco. I can see no point in having the industry at all. I am not alone on these Benches seeing no
I suggest to my hon. Friend the Minister, first, that he should give us a commitment that the Government will endeavour to ensure that we can debate these vital matters at a reasonable time so that people can know about them. Secondly, if we want to try to stop fraud, the easy answer is to say no next time the Common Market asks for more


cash. Thirdly, does my hon. Friend agree that there is little point in talking about new initiatives and setting up new fraud units when all the evidence shows that despite all the assurances, things go on the same as always?
If we doubt that, we need only look at the current budget for the CAP. Despite the massive programme of the destruction of mountains of food, we find that, this year, £9 billion is being spent on the simple destruction and dumping of food surpluses. It is a scandal, as are many things in the report, but the biggest scandal is to debate the report 14 months late at 11 pm.

Mr. Anthony Beaumont-Dark: My contribution to this debate will be brief, as time is very limited and other hon. Members want to speak.
It is rather sad, especially during a week when the parliamentary burden has been comparatively light and there have been very few votes, that the very important issue of Common Market finance and the Court of Auditors is given such low priority. This is a matter to which my hon. Friend the Member for Southend, East (Mr. Taylor) and I have referred on many such occasions. We say—in vain, I know, but it should go on the record as it appears to be the view of all of us—that the House does not appreciate the fact that tens of billions of pounds go astray. But even when money is being spent properly, we are given little time to debate the expenditure.
Let me return to a point that I made in an earlier intervention. The Court of Auditors sets us on the road to fraud because people think that it is a court. It is not a court at all. One is not criticising the work of the auditors when one says that it is not a court. It cannot initiate prosecutions. It reports, I think, to the Council of Ministers. We all know what happens then. Tons of people have their hands and feet in the trough: "You scratch my back, and I'll scratch yours." That applies particularly to Spain, Greece and Italy. It applies to the Irish farmers, who, in their lovely slap-happy Irish way, keep hurling the same cattle and pigs back and forth over the border and collecting money every time they pass go. It must be absolutely splendid for them. I love the Irish, and I think that if peace ever came to Ireland I would have a farm on the border myself—[Laughter.] There is a certain humour about this, but it is appalling.

Mr. Roger Knapman: Is my hon. Friend aware that France now has a record grain surplus of 5 million tonnes? That grain is being shipped to Northern Ireland, and £1 a tonne more than market price is being charged, despite the fact that shipping costs £7 or £8 a tonne. What does my hon. Friend think the Court of Auditors will say about that in two or three years' time?

Mr. Beaumont-Dark: I am grateful to my hon. Friend for the point that he has made. Of course, those of us who have been aficionados of the Common Market for some years are completely unmoved by such a thing. It is part of the general madness of the system of finance. I am sure that the Court of Auditors will simply open another large bottle from the wine lake to slake their thirst and keep their nerves steady.
The point that I want to make is clear. We are about to enter a period in which more of our money and more of the

money of everybody else in the Common Market will go to our friends from east Europe who have discovered freedom late in the day. Happily, of course, it is never too late to be free. The money going to the Poles, the Romanians, the Hungarians and the East Germans will be administered under the sort of ramshackle, wretched, fraudulent system that cannot be contained even in a part of Europe where, for at least 200 years, people have been running things in a reasonably democratic way. Imagine what will happen to the millions of pounds, ecu, or whatever, that will go hurtling into those countries. I prophesy that the Court of Auditors will look upon that as an appalling situation and will say that anything that goes on in western Europe is absolutely marvellous. We may have fraud here, but one thing that people in east Europe have learnt is that fraud comes easy.

Mr. Teddy Taylor: They are well experienced.

Mr. Beaumont-Dark: They are well experienced in fraud. They were brought up with it. To survive, poor devils, they had to be.
If we are not careful, 80 per cent. of the money that goes to east Europe will not be put into proper schemes. I hope that we shall tell the Common Market quite clearly that if such things can happen here—I am not criticising the Court of Auditors; just the name—we should have a really strengthened bunch of auditors to make sure that, in the case of east Europe, money goes to the people whom it is intended to help, and is not used to bolster a new kind of bureaucracy and a new kind of financial dictatorship. It has happened in the past and could certainly happen again.
I wish to raise a matter that is a little nearer to home—the European development fund. It is most disappointing that the court should have expressed its amazement—its word, not mine—that there has been a reduction in the proportion of the aid from the fund going to industrial projects. In terms of growth, the projects aided have hardly any incentive effect on the economic activity in the region. That is an appalling indictment of the Common Market. The fund was meant to be an engine to power economies and to help deprived regions to get going. If it is not working, let us abandon it and keep the money. We can spend it far more wisely on the purposes for which it is intended. I estimate that we subscribe £300 million or £400 million of our money to the fund. We could do a lot in the north of England and the midlands with that money.
I end as I began. We must concentrate on helping our friends in the emergent new democracies, but we must ensure that the greater proportion of the hundreds of millions of pounds involved ends up where it belongs—on the backs and in the stomachs of those whom we are endeavouring to help—and not in somebody's else's pocket. The Government could do something to ensure that, and I hope that they will.

11. 11 pm

Mr. Bowen Wells: I join the hon. Member for Islington, South and Finsbury (Mr. Smith) in congratulating the Government, who have led the fight against fraud in the European Community. The Commission paid tribute in its report to the degree of political support for the fight against fraud, which it says has produced tangible results. That is due in large part to


the activities of Ministers in the British Parliament and to our debates over the years—however short—drawing attention to fraudulent activities.
We should warmly welcome the fact that we have achieved an increase in the number of auditors and that they now have the power to conduct spot checks of the way in which European funds—in the CAP and in structural funds—are being applied. The increase to 30 auditors is welcome, although that figure is still quite insufficient for the task. I hope that my hon. Friend the Minister will encourage further moves to enlarge the staff so that we can make certain that member states administer CAP and other European funds properly and that those moneys are properly accounted for. Without such a move, I doubt whether we shall begin to stamp out fraud in many of the European countries that administer European funds—a point to which my hon. Friend the Member for Southend, East (Mr. Taylor) referred.
Let me take the Minister up on the question of the Treasury function of absorbing European funds into Government programmes and not delineating properly so that the public can see where the money is coming from. That makes for difficulties in auditing the use of European money and means that the people of Britain do not know whether the money is coming from the Treasury or from a European source. That weakens support for the European Community in Britain and may in itself be a fraudulent use by Britain of European funds for programmes decided and agreed in Europe.
My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) referred to the European development fund. Paragraph 70 on page 195 of the auditors' report contains an alarming statement on the question of its administration:
There is still no notion of accumulated experience in the development field. Regardless of evaluations of individual past development projects or measures, the lessons learned from this or that type of operation, or in this or that field of activity, should be more clearly brought to the fore, if only in order to emphasize the absolute need for certain commitments, whenever it is clear that failures are due to shortcomings or omissions on the part of the administrations concerned.
The imbalance between the objectives proclaimed throughout the programming process and the results obtained so far, which. all things considered, are modest, is evidence of the difficulty that most ACP countries experience when they try to adopt a genuine development strategy.
It goes on in that vein. We have now voted, or are about to vote, through the new Lomé convention—another £8·5 billion to the European development fund. I submit that the fund's method of administering that money is seriously at fault. When each Lomé agreement is reached, the European development fund goes round the countries establishing what it calls umbrella agreements for each one.
The umbrella agreements set a total budget for a country which must be spent. If it is not spent the officer involved is called to account. That is a wasteful way to use development funds. It will apply in eastern Europe because, as my hon. Friend the Member for Selly Oak said, the same people will administer the considerable funds being made available to eastern Europe. That is to say that they will not establish what is needed, what funds must be used for particular purposes and whether those purposes can be fulfilled within the economic infrastructure of a country. In agreement with the developing country—presumably with Poland, Czechoslovakia and so on if we

do not check this—we shall simply stipulate a certain sum of money to be spent and we shall spend it on anything that the Government of that country wants. That is entirely wrong. We should decide what we shall support, put the money in and then ascertain whether it has been spent properly and the objectives have been achieved. In that way the auditors could check what the EDF is doing with our money. That is an important point which I hope that my hon. Friend the Minister will take up at the Council of Ministers.
As the hon. Member for Newham, South (Mr. Spearing) said, Parliament discharges the report. But what option does it have? It can either discharge it or not discharge it. If it does not discharge it, what will happen? The answer is nothing. The only sanction that we have is under the recent court ruling which stated that, where fraud takes place in a member country, that country has to repay the money to the European Commission. That principle should be established by the European Parliament so that, where it finds that the auditors are right and money has been misspent, the member country must repay it to the Commission.

Mr. Ryder: I was dismayed to hear my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) contemplating the day when he will become a farmer in Ireland as I had fondly envisaged that when we retired he and I could become VAT inspectors in Palermo or at least agricultural officials in the Peloponnese. I am sure that we would make good VAT inspectors in Palermo.
In the short time that remains, I will do my best to answer the main points raised in the debate. If I am defeated by the clock, I apologise and will write to those hon. Members whose points I have not covered.
I am grateful to the hon. Member for Islington, South and Finsbury (Mr. Smith) for his remarks about the quality of the Treasury memoranda and above all for his praise of what he described as the Government's robust attitude to fraud. I appreciate his words. I am also aware that he would like the Treasury memoranda to be improved even more and I will look into that on his behalf.
The hon. Gentleman tackled several matters and I will comment on as many of them as possible. I am pleased to inform him that a treaty on extradition and transfer of criminal proceedings from this country to another country has been drafted. The implications of the draft are being considered in the light of the judgment in the Greek maize case to which I referred in my opening remarks.
I agree with the hon. Member for Islington, South and Finsbury that controls have not been sufficiently tight in the past, which is precisely why the requirements have been strengthened during the past year and minimum levels of physical examination have been specified. Those improvements are in no small measure due to the efforts that have been made by the Government, by Ministers in all Departments and, above all, by the decisions that have been taken by ECOFIN and by the European Council when it met in Madrid last June.
The report notes that the Court of Auditors is preparing a further separate report on export refunds, and I am pleased about that. When we receive it, we shall see what other specific actions are needed. As I explained in my opening speech, we do not believe for one moment that


we have conquered fraud—far from it. I agree with my hon. Friend the Member for Southend, East (Mr. Taylor) who I do not think was in his place earlier when I said that, like him, I believe that at present we are seeing only the tip of an iceberg—those are the words that I used—and that that is why the British Government are keener than any other Government in the European Community to get to grips with this serious problem.
I can assure the hon. Member for Islington, South and Finsbury that there is no complacency in our attitude to regional funds. As I said earlier, we believe that the court's criticisms are misplaced. As a result of Community receipts, public expenditure is higher than would otherwise be the case. I will try in a moment to answer the specific point about Community receipts that was raised by my hon. Friend the Member for Hertford and Stortford (Mr. Wells).
The hon. Member for Islington, South and Finsbury and one other hon. Member expressed concern about the number of staff in the anti-fraud unit in Brussels. Thirty people now work in that unit, so the number has trebled since 2 March last year when we held a similar debate, when there were 10 people working in the unit. However, that is only part of the story because those 30 people represent only a proportion of the total number of staff engaged in anti-fraud activities in the Commission. Specialist staff deal with these matters in each relevant directorate general. The House can be sure that the British Government will continue to press for an effective unit in Brussels to combat fraud—just as we have done in the past year—and we shall also be looking to see whether the directorates general need to be improved so that the staff to whom I have already referred can help with this subject.
I mentioned earlier the improved reporting requirements for the structural funds and own resources. There are two further improvements in train which are relevant to the observations made by the hon. Member for Islington, South and Finsbury. After 18 years of legal and administrative discussions, the Community has finally managed to come up with an agreed definition of "irregularity" for the purpose of reporting. The 1986 Court of Auditors report lamented the absence of such a definition.
The Commission will shortly present an amended version of the main regulation governing reporting requirements in respect of CAP expenditure. We hope that these proposals will contain clear requirements for member states routinely to report cases of fraud and irregularity.
At this stage, I should like to reassure the hon. Member for Newham, South (Mr. Spearing) on the question of follow-up to the report on intervention. I am advised that the working party that was set up to consider improvements to the intervention system met several times and, as a result of its work, a number of reforms have been agreed which go a long way towards meeting the court's recommendations. These include changes to the system of financing on a flat-rate basis,; improvements in the system of accounting and the introduction of an annual physical check on intervention stocks.
The hon. Member for Newham, South was also concerned that we had given no satisfactory answer to last year's amendment on discharge. Since he made that point

I have had a quick glance at last year's debate on the Court of Auditors report. In the first two paragraphs of Hansard, my right hon. Friend the then Paymaster General, now the Secretary of State for Northern Ireland, dealt with that very question. He said:
First, by formally withholding approval of the discharge, we would be admonishing the Commission, because the Commission alone is responsible for implementing the budget and drawing up the accounts. If our motive for withholding approval was to make a broader point about fraud and mismanagement, the impression therefore would be that we were holding the Commission to be largely responsible for such problems. In fact, the responsibility goes much wider."—[Official Report, 2 March 1989; Vol. 148, c. 456.]
My hon. Friend the Member for Ludlow (Mr. Gill) queried the Government's commitment to follow up the last ECOFIN, on 15 March 1989, which dealt with the Court of Auditors report. I think that he was here when we began the debate at 6.30 pm, but I assure him that I was able to outline the ways in which the Government have followed up the debate and the Court of Auditors report last year. We did so not only at ECOFIN on 15 March, but at subsequent ECOFINs, and have continued to do so. Our successful application of pressure to introduce new provisions on sound financial management and accounting into the revised financial regulations has brought about one of the biggest improvements in the past 12 months.
My hon. Friend the Member for Southend, East observed that the time provided for this debate was inadequate in view of its importance and significance. I promise to pass on to my right hon. and learned Friend the Lord President the remarks of my hon. Friend the Member for Southend, East and others, including my hon. Friend the Member for Selly Oak. I understand that in previous years the debate has taken one and a half hours, and it was only last year that a three-hour slot for the debate could be found by the business managers.
I cannot share the pessimism of my hon. Friend the Member for Southend, East about the action taken to combat fraud, nor can I share the optimism of those who claim that all is well. That is precisely why the Government will continue to spearhead efforts to get to grips with fraud. In my opening speech, I outlined what we had done and gave an indication of what we proposed to do, not only at ECOFIN in two weeks' time but during the next few months.
My hon. Friend the Member for Selly Oak talked about the money wasted on structural funds. It is worth remembering that the court's report relates to 1988. Since that report, as he knows, the operation of structural funds has been substantially reformed.
My hon. Friend the Member for Hertford and Stortford claimed that people do not know where the United Kingdom's EC receipts are going. I refer him to the annual White Paper on public expenditure which gives a detailed breakdown of Community receipts by programme.
As usual, the debate has been lively and well informed. The House has recognised that significant progress has been made in the past 12 months. I do not wish to exaggerate that progress because—here I agree entirely with my hon. Friend the Member for Southend, East—much more needs to be done, but the Council has now approved the new financial regulation and that is a major advance that we should all welcome. We should be clear, however, that fraud remains a major problem and we certainly cannot afford to relax our efforts.
As I stressed earlier, this debate will help to inform the Government's policy when we go to ECOFIN on 12 March. Our primary purpose at that meeting will be to secure specific conclusions committing the Community to further detailed measures in clearly defined areas. At the March 1989 ECOFIN we identified export refunds and intervention storage and action has been taken in terms of that remit. This year we shall emphasise, among other things, improved reporting, the need for agreement on administrative sanctions and further progress on the simplification of regulations.
I hope that I have reassured the House that the Government take this matter very seriously indeed. By outlining the progress that we have made in the past year, I hope that I have satisfied the House that we are in the vanguard in Europe, and I hope that when we have a similar debate in a year's time I shall be able to report even more progress.

Question put and agreed to.

Resolved,
That this House takes note of the Annual Report of the Court of Auditors of the European Communities for 1988 and European Community Document No. 4582/90 relating to action against fraud; and approves the Government's efforts to press for value for money from Community expenditure.

Orders of the Day — PETITIONS

East London Assessment Study

Mr. Chris Smith: I have the honour to present 10 petitions to the House, all on the subject of the east London assessment study road proposals as they affect my constituency and that of my hon. Friend the Member for Islington, North (Mr. Corbyn). These are in addition to the 37 petitions that I presented on Friday morning and in addition also to petitions from the residents of St. Peter's ward, from members of the congregation of the Union chapel and from Mrs. Sherlock, which I deposited in the Bag earlier today.
I have a petition from the residents of Compton terrace, in my constituency, signed by all the residents of Compton terrace, which
Sheweth that the east London assessment study road proposals will be detrimental to our community and environment. Wherefore your Petitioners pray that your honourable House will urge the Secretary of State for Transport will give due attention to improving public transport rather than increasing the road capacity which will inevitably be filled by people commuting by car.
Those are sentiments with which I wholeheartedly concur.
There is a petition from citizens concerned with the environment and quality of life in London, drawn from all parts of Islington. They urge that the implementation of the east London assessment study road proposals will be harmful to the environment by attracting increased car traffic into London.
There is a petition from residents of College cross, Witherington road and other parts of Islington showing that the road proposals will harm the environment through noise, pollutants, the division of communities and increases in global warming. They urge the Secretary of State likewise to increase investment in public transport.
There is a petition from the merchants and shoppers of Holloway road. They show that the road proposals will be detrimental to our environment, our communities and our amenities. They urge the Secretary of State to abandon the road-widening schemes.
There is a petition from the residents of Holloway road and surrounding streets. They show that the widening of Holloway road will increase the number of lorries using the road and greatly increase the noise level. They urge the Secretary of State for Transport to abandon the proposal to widen Holloway road and instead to increase investment in public transport.
There is a petition from the parish and community of the Church of the Sacred Heart of Jesus in Eden grove, in my constituency. It shows that the ELAS road proposals are totally unacceptable and would cause the widespread destruction of homes, businesses and workplaces. It would mean an increase in noise, dirt and pollution. The petitioners fear for the safety of old people, mothers with prams, toddlers and children who attend Our Lady of the Sacred Heart school in Eden grove, who will often have to make the hazardous crossing to attend the school, church and community centre. They too urge the Secretary of State for Transport to abandon the new road schemes.
There is a petition from the residents of Upper Holloway. They show that the ELAS road proposals will


drastically reduce the value of their properties. They urge the Secretary of State for Transport to abandon the road proposals.
There is a petition from residents of Dunmow walk. They believe that the road proposals will be detrimental to their environment.
There is a petition from residents of Ronalds road. They believe that the proposals will be detrimental to the environment by increasing pollution, traffic congestion and causing destruction to existing communities.
Finally, there is a petition from the staff of the Whittington hospital, Highgate hill. They believe that the ELAS road proposals will greatly increase the transport problems that they will have in getting to and from work. They believe that it will have a disastrous effect on the services that they provide to patients in the local community, and they believe that the proposals will damage the environment in which they work due to increased pollution. They urge the Secretary of State for Transport to drop all the road widening schemes and greatly to improve public transport.
The petitions contain thousands of signatures. They represent part, but only part, of the anger and dismay felt by my constituents at the proposals for major road building which the Secretary of State for Transport is currently considering, and which no one in my constituency wants to see happen.

To lie upon the Table.

Mr. Jeremy Corbyn: Last Friday, I and my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) presented 86 petitions to the House, and tonight we are presenting another 20 or so. In total, more than 10,000 people have signed more than 100 petitions opposing the proposals to build major roads through our constituencies and those of our hon. Friends.
Tonight I am presenting to the House 14 petitions with nearly 1,000 signatures and I have also put in the Bag a petition in similar terms from the vicar and parishioners of St. Thomas the Apostle church on St. Thomas's road, near Finsbury park.
The first petition that I wish to present is from the residents of St. George's, Islington, N19 and N7. It reads:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament Assembled.
The Humble Petition, of the residents of St. George's Islington, N19 and N7 Sheweth.
That the ELAS Road Proposals will not meet the Department of Transport's stated Objective of improving the Environment. On the contrary, the proposal D2 for the "upgrading" of the Holloway Road will in practice mean the conversion of our local High Street into a massive commuter rat run. The effect of such a drastic increase in speeding traffic, noise and pollution will be to devastate our communities on either side of the road, with continuing blight and loss of local shops and facilities.
Wherefore your Petitioners pray that your honourable House will urge the Secretary of State for Transport to reject this option D2 and all road-upgrading schemes in London, and concentrate instead on improving public transport services and restraint of commuter traffic in London.
And your petitioners, as in duty bound, will ever pray.
I have a petition from the residents of London, most of whom live in the boroughs that I and my hon. Friend represent, concerning the safety of cyclists and pedestrians

who would ordinarily use roads and imploring the Secretary of State for Transport to reject the road-building proposals because of the danger to cyclists, pedestrians and other road users, and instead to increase investment in public transport, to reduce fares and to increase the usage of them.
I have a petition from the residents of 31 Huddleston road and their friends, signed by some 39 people living in a few houses in that area, pointing out that the road proposals will harm their environment and cause road traffic congestion and accidents.
I have a petition from the Boye-Anawomah family who live at 5–7 Marlborough road, Upper Holloway, N.19. It points out that the result would be the ruin of their home and their environment, and the destruction of their local shops and other amenities, and that it would drastically reduce the value of their property and make it unsafe for their children to cross Holloway road. Again it asks that the scheme be dropped.
I have a petition from 24 fathers of children who live in north Islington, pointing out that if large roundabouts between Archway and the Nag's Head shopping area go ahead, the increase in the volume of traffic will pollute the air and increase the level of noise, and endanger their children's physical and mental growth, something that is well documented because of the lead and other forms of air pollution that we suffer from through traffic in our borough.
The residents of Horsell road point out that the building and upgrading of the road will cause increased levels of traffic in the study area generally and on the southern section of the Holloway road in particular, creating an environment increasingly hostile to pedestrians and inhibiting access to shops, public transport and other local services essential to the community. Again they ask for an improvement in public transport as an alternative, and a cheaper and more sensible way of proceeding.
I have a petition signed by only one person, who represents a large number of people, as he is acting chair of the Drayton park neighbourhood forum. There are 24 such forums in the borough which I have the honour to represent. Again he points out that the proposals for a priority route network described in "Traffic in London" and in the east London assessment study will encourage increased levels of car use and will lead to greater congestion in north east London, polluting the environment with noise, noxious emissions and greenhouse gases, and causing harm to the residents. Again, the petition asks the Secretary of State to reject any proposals for the upgrading of the road. That is signed by Mr. Bernstein, who represents a large number of people who are genuinely and deeply concerned.
I have a petition signed by 52 mothers of children who live in north Islington. It points out that the increased volume of traffic will pollute the air and increase the level of noise, and endanger their children's mental and physical growth. It urges the Secretary of State to abandon all road widening schemes put forward.
I have a petition from the Byam Shaw school of art, in Elthorne road, N19, showing that the east London assessment study proposals, in particular the widening of Holloway road, will divide the community and ruin the environment in which the students work and study. Again it urges rejection.
The members of the Tufnell park neighbourhood forum ask for rejection of the proposal. They organised a


public meeting where the hall proved not to be big enough for the 400-odd people who tried to attend to register their concern.
I have a petition from the residents of Archway, showing that the road proposals will be damaging to the homes of people who live in that area. That is signed by 250 people.
I have a petition from the mothers at the Whittington one o'clock club, which is for small children, and the over-60s at Whittington court—an interesting combination. They have come together to point out that the proposal will be harmful to children attending the club and the surrounding park, and they urge rejection of it.
There is a petition from the residents of Holbrooke court in London N7, which overlooks Holloway road and Parkhurst road. It points out that they are opposed to the widening of Archway road and Holloway road because of the destruction of homes, workplaces and churches, and the ruination of the Nag's Head shopping centre. They say that the proposal will increase London's already severe traffic problems.
Finally, I have a petition from the parishioners of St. John's church, London N19, showing that the ELAS road proposal will cause the destruction of the church. A large number of churches along the route will be destroyed, as well as many homes, community centres and jobs.
I hope that the House, in receiving these petitions, will seriously consider the total opposition to major road-building proposals and the awful damage that they will do to the borough that we have the honour to represent.

To lie upon the Table.

Orders of the Day — Actors (Taxation)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Greg Knight.]

Mr. Tom Arnold: I am grateful for this opportunity to raise the issue of the tax treatment of actors and actresses, because I wish to alert the House to a proposal by the Inland Revenue to treat actors and actresses—particularly newcomers to the profession, about whom I shall have something further to say later—as employed by producers and therefore subject to tax under schedule E of PAYE as from 5 April this year.
I am delighted to see the Financial Secretary to the Treasury here, although he may be somewhat weary at having to contemplate traversing yet again the ground which he covered at the meeting on 25 January with my hon. Friend the Member for Arundel (Mr. Marshall) and my right hon. Friend the Member for Shoreham (Mr. Luce), who represents the Society of West End Theatre. I am also pleased to see my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) in his place because he also represents that society and has shown a keen interest in the theatre for many years.
I must declare an interest, which is in the Register of Members' Interests, and to which I have drawn hon. Members' attention publicly on a number of occasions over the years. Before and indeed after entering the House I was a producer and I have employed many actors and actresses. I do not employ any at the moment, but there is always the possibility that I will at some time in the future, and I am still a member of the Society of West End Theatre.
I am somewhat out of touch, on a day-to-day basis, and I must confess that I was not aware of the latest developments until I was approached by a firm of solicitors, Wright Webb Syrett of 10 Soho square, which has acted for many branches of the theatrical profession over the years. The firm acts for the Personal Managers Association and for numerous stage and film actors, actresses and producers. There is a general feeling that the impact of the proposals will pose a serious threat to the theatrical profession—a profession which I think we all recognise has a tradition second to none, and which contributes enormously to the culture of our nation.
Briefly, stage performers have traditionally been taxed under schedule D, a position endorsed by the High Court in 1921 when Lilian Braithwaite successfully argued that she was assessable under that schedule in respect of profits which she derived from her profession.
In 1972, however, in the case of Fall v. Hitchin, a ballet dancer engaged at Sadlers Wells was held to be employed and therefore taxable under schedule E. It seems that the Inland Revenue, on the basis of that somewhat aged case, now proposes to adopt the proposition that all stage personnel should be taxed under schedule E. Let me make it absolutely clear that, so far as I can judge, the Revenue's behaviour has been impeccable. It has listened at length and courteously to all the representations. It has replied, sometimes voluminously, to the various points that have been put to it and it has allowed a great deal of time in which the profession could make arrangements.
However, the Revenue's view is necessarily narrow, and tonight I urge the Government to take a wider view of some of the implications of what is proposed. Equity, the


actors' trade union, and the theatres national committee have jointly made representations to the Revenue, so far without success. The Inland Revenue seems determined to proceed with its intention. That is not satisfactory. To start with, actors and actresses have differing circumstances, and the Revenue will be faced with expensive appeals. Those appeals will, as a result of the change, proliferate.
There are a number of other consequences which I believe are serious. The Inland Revenue is saying that newcomers must be taxed under schedule E after 5 April. Theatres in the regions in particular will be greatly affected, because those theatres tend to attract newcomers to the profession and in many cases they already operate under grave financial limitations. All the signs are that the actors and actresses affected by the change will demand higher salaries and that the employers, be they repertory theatres or individual producers, will be asked to bear the costs. To meet that demand they will have to reduce some of the concessions which they offer to their customers at present, and that will be in direct opposition to the policy that they have been urged to follow by the Arts Council. But there is no other way in which they will be able to maximise their revenue to meet the additional costs. There is a real threat that a number of the smaller repertory theatres may have to close as a result of the proposal.
Apart from the huge administrative problems, I believe that great injustices will result from the distinction between allowable expenses under schedule D and those under schedule E. Under schedule E, allowable expenses are those incurred wholly, exclusively and necessarily in the performance of the employment; artistes, however, incur considerable expenses that would not be allowable according to that definition.
Under schedule E, touring and living expenses would have to be borne out of taxed income. That includes the cost of travel to and from venues for rehearsals and performances away from home; self-promotion, including printing and advertisements, photographs, blocks and so forth; the cost of theatre tickets for agents, managers and press; audition expenses, telephone calls, postage and stationery; singing and dancing coaching, including the hiring of rooms; theatre laundry; the cost of repair to wardrobe and props; the cleaning of wardrobe and props; the cost of replacements to wardrobe and props; the cost of renewing wardrobe and props; chiropody for dancers, especially ballet dancers; hairdressing; insurance; and professional fees. That load will be too heavy for most artistes to bear.
I have left until last the most onerous charge of all—one that is causing considerable confusion and has a number of curious features. I understand that henceforth the fee paid by an artist to his agent will also be chargeable against him for tax purposes. That is unfair, and likely to lead to real difficulties: perhaps the Financial Secretary can clarify the position.
In a letter dated 31 July last year, Mr. Peter Lewis, director of the personal tax division of the Inland Revenue, wrote:
On agents' fees, it would not be appropriate for the Revenue to advise on the contractual changes needed to ensure that actors assessed under Schedule E do not pay tax on agents' fees. But we thought it might be helpful to you to suggest that you consider whether the present arrangement under which these fees represent a slice of the actor's income which he in turn has to pay over to the agent is the only

possible one. While the detail of the relationship between actor and agent is probably unique to your industry, we were conscious that the same problem does not arise in other agency situations such as the temporary agency workers supplied by employment agencies. There the agency obtains its commission direct from the client not through the worker. If similar contractual arrangements were introduced for actors the difficulty with agents' commission you have identified would not arise. It is entirely a matter for the industry to decide whether or not possible changes of this kind should be considered, and if they are possible, whether or not they should be implemented. But we would, of course, be happy to give our views on the tax consequences of any new arrangements you contemplated introducing.
Curiouser and curiouser. The Revenue has shown a remarkable naivety in what appears to be a suggestion that theatre managements should pay agents direct. That cuts across the whole legal concept of agencies. The Revenue makes an analogy with that of employment bureaux, but such bureaux are specifically not permitted by statute to charge the principal—that is, the employee. They can charge only the employer. Section 6 of the Employment Agencies Act 1973 makes such behaviour a criminal offence. We are none the wiser about the Revenue's intentions.
At a meeting on 10 November 1989 the Inland Revenue suggested—I quote from a memorandum of what took place—
that an application could be made to the IR Board for extra statutory allowances but that if a generous interpretation of the rules concerning allowable expenses under Schedule E was made there might be no need for such an application. The need for consistency of interpretation would be important in such an event.
Does the Inland Revenue expect actors and actresses to pay their agents and then to have to pay tax on those fees? The position is unclear. The Inland Revenue says that it proposes to leave the matter in the hands of tax inspectors. That is unsatisfactory, and I invite the Financial Secretary to comment upon it.
At the meeting on 25 January I understand that the Financial Secretary said that he would let the industry's representatives have the Government's considered view after the Budget. I hope that it is not too late for the Government to think again and to introduce into the Finance Bill a clause that would restore the position to what it was when actors and actresses were taxed under schedule D and allowed to claim various expenses. I strongly believe that, if the proposal is allowed to go ahead in its present form, grave damage will be caused to regional theatre in particular, that there will be a proliferation of appeals and that that will not be the end of the matter.

Sir Fergus Montgomery: I am grateful to my hon. Friend the Member for Hazel Grove (Mr. Arnold) for allowing me to take part in his Adjournment debate. My hon. Friend's father was a distinguished impresario. When I was young I used to go to the Empire theatre in Newcastle upon Tyne. It was a variety theatre, with once-nightly productions that were invariably "Tom Arnold presents" productions. That was always a sign of class and of a good show.
The theatrical profession is insecure. If one is a Laurence Olivier, or a John Gielgud, or an Alec Guinness, one will have a marvellous time, be at the top of the bill, have one's name above the title of the play and earn a great deal of money. However, there is a higher percentage of unemployment in the theatrical profession than in any


other occupation. The Inland Revenue's proposal that actors and actresses should be taxed under schedule E is causing great concern. Traditionally, they have been taxed under schedule D.
My hon. Friend emphasised that, under schedule E, allowable expenses are those that are incurred wholly, exclusively and necessarily in the performance of the employment. Actors and actresses incur considerable expenses that would not be allowable under such a definition. The agent's fee would not be allowable. An actor or actress needs an agent to get a job. I believe that the agent's fee is still 10 per cent. of earnings. Touring and living expenses would not be allowable.
The theatre does not depend just on the west end. We have a thriving provincial theatre. My hon. Friend and I represent constituencies near to Manchester, and we believe that Manchester stages the best theatrical events outside London. Actors and actresses appear there in touring productions and give a great deal of pleasure.
The Equity subscription would not be allowable, either. Unless actors and actresses are Equity members they cannot get a job. Furthermore, there are audition expenses. Auditions are compulsory before anybody is given a part in a production. Then there are telephone calls, postage, stationery and make-up expenses. All those are essential tools of the trade.
I hope that when my hon. Friend the Financial Secretary replies to the debate he will say that common sense will prevail and that the Inland Revenue will have a change of heart.

The Financial Secretary to the Treasury (Mr. Peter Lilley): I congratulate my hon. Friend the Member for Hazel Grove (Mr. Arnold) on securing the debate and my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) on his contribution. It is often thought that the House consists exclusively of merchant bankers and polytechnic lecturers, but it is valuable that we include hon. Members with the experience of theatrical production of my hon. Friend the Member for Hazel Grove and the experience of my hon. Friend the Member for Altrincham and Sale from the other side of the footlights. I welcome the fact that they have raised this important matter today.
The issue at stake is the standard Equity contract and whether those engaged under it are employed or self-employed. That is essentially a matter of law and not, as some people imagine, a matter of choice. People do not have the right to choose whether they are self-employed or employed. Nor is it a matter of the Revenue making its own judgments. The Revenue simply applies the law as it sees it and as it has been established by the courts. It applies a number of tests.
As my hon. Friend said, the main court case involving the theatrical profession was in 1972. It is a long time since that ruling, which was a clear one but still has not been fully implemented. There was a period of waiting for Equity to appeal, as it was a test case, but eventually in 1975 it chose not to do so. Subsequently, there was a period of negotiation. Instructions were sent out, but I understand that the new treatment was only patchily applied. Subsequently Equity discovered the inconsistencies and there were complaints, further discussions and negotiations. More recently, the final decision has been taken to apply the law, but only gradually and with

transitional arrangements. The transitional arrangements mean that those who have an established record of working under contract in the theatrical profession and have been taxed as self-employed will be able to retain that tax status. The new status will apply only to newcomers to the profession who do not have that established record. Over a generation it will come in fully. The Revenue has been endeavouring to establish with Equity those who will be the beneficiaries of the right to remain treated as self-employed.
The Revenue has stated that if Equity wishes to bring in another test case, it would be happy to co-operate to discover whether a different interpretation of the law was possible if Equity believes that the 1972 case is out of date, circumstances have changed or things were not properly considered on that occasion. The Inland Revenue has thus shown a clear willingness to apply the law as flexibly as is empowered to do and to co-operate as closely as possible. with the theatrical profession.
One of the principal issues at stake is that of expenses, as my hon. Friend said, and most particularly the agent's fee. He was right that the Inland Revenue told Equity that it was open to suggestions as to how expenses might be treated in a way which would mean that they had to be paid out of taxed income. The theatre employers and Equity said in November that they were considering the Revenue's suggestions that the present contractual arrangement used be revised. They told the Revenue that they might have some legal difficulty with that—perhaps the legal difficulty to which my hon. Friend referred—but that they were still considering it. They have not yet returned to the Revenue on that, nor suggested what legal difficulities they are examining, but the Revenue remains available to discuss their problems.
The fact that employment agencies are prohibited by law from charging an individual an agency fee does not mean that those who are not forbidden by law are compelled to do otherwise, but there are doubtless people in Equity and the Revenue better placed than I am to discuss such legal matters.
It has been suggested that we should legislate to determine specifically that members of the acting profession be treated as self-employed and not subject to PAYE. Unfortunately, many other groups believe that they are special cases—sometimes for reasons similar to those given by the acting profession and sometimes for reasons unique to their own circumstances. Once one started doing that, one would be on the slippery slope of determining by law where each profession stands on employment and self-employment. It is better to leave it to the general rule and to the case law that has developed as that general rule has been applied.
For national insurance purposes, actors have managed to retain employed status, which is advantageous because, unfortunately, unemployment affects many actors for significant periods. They would not wish to lose that status. I do not think that the issue can be settled by changing the law specifically for the acting profession.
I hope that the discussions between Equity and the Revenue will find some way of softening the treatment of what at present are expenses by recasting them in a way


that will comply with the law and will mean that they are not expenses. If it is possible to make progress on that, no one will be happier than I.
I have listened carefully to the comments of both my hon. Friends and I shall reflect further on them when I discuss

these matters with the Revenue. I hope that I have done my best to explain how this development occurred and to convince them that we are anxious to be as co-operative as possible.

Question put and agreed to.

Adjourned accordingly at seven minutes past Twelve o'clock.